Reduction in its key policy rate, from 15% to 13%, effective from December 17, 2024
\n Islamabad
\nThe State Bank of Pakistan (SBP) announced on Monday a 200 basis points (bps) reduction in its key policy rate, lowering it from 15% to 13%, effective December 17, 2024
\nThis follows a decline in headline inflation to 4.9 percent year-on-year in November, in line with the central bank\u2019s expectations.
\nThe decision was made at a meeting of the Monetary Policy Committee (MPC), which noted that food inflation and the diminishing effects of last year\u2019s gas tariff hikes contributed significantly to the inflation slowdown.
\nHowever, core inflation remained stubbornly high at 9.7 percent, while consumer and business inflation expectations continue to be volatile.
\n\u201cThe recent policy rate cut is aimed at bolstering growth, while also ensuring inflation stays within manageable levels,\u201d said the MPC statement. The MPC further noted positive economic signals, including an increase in high-frequency indicators of economic activity.
\n\u201cWe expect GDP growth for FY25 to fall in the upper half of the projected 2.5%-3.5 %,\u201d the statement added, pointing to improved agricultural and industrial sector performance.
\nThe committee also highlighted key developments since its last meeting, including a surplus current account for the third consecutive month, which has helped boost foreign exchange reserves to approximately $12 billion.
\nAdditionally, private sector credit has risen, reflecting easing financial conditions.
\nDespite these positive signs, challenges remain, especially in the fiscal sector. Tax revenues have fallen short of targets, and substantial efforts will be needed to meet annual revenue goals.
\n\u201cWhile the broad money growth has slowed, credit to the private sector has accelerated, contributing to the ongoing economic recovery,\u201d the MPC said.
\nThe SBP expects inflation to stay lower than its previous forecast of 11.5%-13.5 % for FY25, although core inflation risks and global commodity price fluctuations may affect the outlook.<\/p>\n","protected":false},"excerpt":{"rendered":"
Reduction in its key policy rate, from 15% to 13%, effective from December 17, 2024 Islamabad The State Bank of Pakistan (SBP) announced on Monday a 200 basis points (bps) reduction in its key policy rate, lowering it from 15% to 13%, effective December 17, 2024 This follows a decline in headline inflation to 4.9 […]<\/p>\n","protected":false},"author":2,"featured_media":377848,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":{"0":"post-449765","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-top-news"},"yoast_head":"\n