State Bank cuts interest rate by 100 basis points to seven percent

By: News Desk      Published: 04:18 PM, 25 Jun, 2020
State Bank cuts interest rate by 100 basis points to seven percent

The State Bank of Pakistan on Thursday slashed the policy interest rate by 100 basis points to 7 percent as a new monetary policy was announced for the next two months, reported 24NewsHD TV channel.

The latest reduction came after the State Bank had opted for a similar 100 basis points cut last month.

It means the interest rate has been reduced five times within three months with a cumulative effect of 6.25 percent.

Earlier in April, the central bank’s Monetary Policy Committee (MPC) had decided to cut the policy rate by two percent.

On March 25, it announced a 1.5 percent cut in the interest rate, reducing it to 11 percent, claiming the decision was taken due to the “uncertainty” over the impact of the ongoing coronavirus pandemic.

The central bank said the measure — taken nearly a week after it cut the policy rate to 12.5 percent — was aimed “to facilitate businesses and exporters who seek loans frequently from commercial banks to run their businesses.”

The State Bank had said that the coronavirus outbreak had hit several industries and the move was designed to help them.

Many among the businessmen and political circles have been critical of the government for high interest rate with a demand of a substantial cut to bring Pakistan at par with other countries.