Pakistan’s central bank cuts policy rate to 19.5 pct amid slightly better inflation

ISLAMABAD, July 29 (Xinhua) — The State Bank of Pakistan (SBP) on Monday announced to cut the policy rate by 100 basis points (bps) to 19.5 percent amid observing slightly better inflation than anticipated.
The Monetary Policy Committee of the central bank also assessed that the inflationary impact of the current fiscal year’s (July 2024 to June 2025) budgetary measures was broadly in line with earlier expectations, the SBP said in a statement.
The external account has continued to improve, as reflected by the build-up in SBP’s foreign exchange reserves despite substantial repayments of debt and other obligations, it added.
“Considering these developments, along with a significantly positive real interest rate, the committee viewed that there was a room to further reduce the policy rate in a calibrated manner to support economic activity, while keeping inflationary pressures in check,” according to the central bank.
Last month, the SBP cut the policy rate by 50 bps to 20.5 percent after keeping it at 22 percent for almost 12 months. ■