SBP cuts key policy rate by 1pc to 19.50pc

On Monday, the State Bank of Pakistan (SBP) announced a reduction in the interest rate by 100 basis points (bps), lowering it from 20.5% to 19.5%. In a statement, SBP Governor Jameel Ahmad said the central bank’s Monetary Policy Committee (MPC) convened earlier in the day to review the current economic conditions, noting that inflation had decreased from a record high of 38% in May to 12.6% last month. The statement also mentioned that the MPC reviewed forward-looking assessments. According to the Pakistan Bureau of Statistics (PBS), headline inflation for June was reported at 12.6% year-on-year. Market participants had widely anticipated a rate cut due to June’s lower inflation rate of 12.6%, although there was some variation in opinions regarding the extent of the reduction.