Pakistan cuts interest rates to 42-year low

[Blue Marlin]

KARACHI: Pakistan's central bank on Saturday (Sep 12) reduced interest rates to a 42-year-low of six per cent, after inflation fell dramatically.

The State Bank of Pakistan (SBP) announced it had cut rates to six per cent from 6.5 per cent.

Inflation came down to 3.6 per cent in July-August from 8.4 per cent in the same period last year due to falling fuel and food prices.

The SBP added the Pakistan economy would receive a boost from infrastructure projects such as the planned China Pakistan Economic Corridor (CPEC).

"Therefore, there is anticipation of higher economic activity in (fiscal year) FY2015-16 which is expected to boost credit uptake," the bank said.

The Pakistan fiscal year begins in July.

The China-Pakistan Economic Corridor (CPEC) is an ambitious US$46 billion investment plan linking western China to the Arabian Sea in Pakistan with infrastructure, energy and transport projects.

Pakistan is set to sign a 40-year-lease with a Chinese company to develop a massive special economic zone in the deep sea port of Gwadar as part of the scheme.

Pakistan's economy grew at 4.24 per cent during the 2014-2015 fiscal year with per capita income rising a significant 9.25 per cent, markers that come as investor confidence in the long-underperforming South Asian country have also increased.

Pakistan is currently in a US$6.6 billion loan programme with the International Monetary Fund, which was granted on condition that Islamabad carried out extensive economic reforms, particularly in the energy and taxation sectors

Pakistan Cuts Interest Rate to 6% to Bolster Economic Growth - Bloomberg Business

 

[OTTOMAN]

Zardari use to take loan @ 22% from IMF

 

[Viper0011.]

KARACHI: Pakistan's central bank on Saturday (Sep 12) reduced interest rates to a 42-year-low of six per cent, after inflation fell dramatically.
The State Bank of Pakistan (SBP) announced it had cut rates to six per cent from 6.5 per cent.

Pakistan Cuts Interest Rate to 6% to Bolster Economic Growth - Bloomberg Business

This is a good move for businessmen, industrialist and all. This should kick off an economic boom on the current infrastructure while CPEC is being built. People would want to take advantage of the low rates to start new business ventures and expand existing ones, etc, etc.

Another interesting part is to notice how closely the Western economic houses like the Bloomberg, etc are watching Pakistan's economy. That means one thing and one thing only, they expect this market to grow to the top 3 most profit returning markets, and that's why so much monitoring. The second electricity becomes available for the larger part of the day and Karachi and Baluchistan peace is established, you'll see significant amounts of investments coming in shortly.

 

[Menace2Society]

Very much on the upswing. Things are looking good for the economy.

I think I will start investing in processed food companies in Pakistan.

 

[Sipahi]

Banks are still giving loans at 14 to 18 pc.

Kis ko faida ho rha hai ???

 

[Dubious]

Banks are still giving loans at 14 to 18 pc.

Kis ko faida ho rha hai ???

andoun ko

 

[Dem!god]

Good for pakistan... lower interest rate will go well with market sentiment and will fuel investment and also demand.. will increase economy....
But at the same time beware of NPA and bad lones...if not controlled have the power to cripple the economy... also inflation gonna rise...due to cheap loan which will lead to higher influx of money in the economy..

 

[Hurter]

Zardari use to take loan @ 22% from IMF

 

[Dem!god]

Banks are still giving loans at 14 to 18 pc.

Kis ko faida ho rha hai ???

It's the central bank which decrease the interest rate to 6%. So wait till the other banks reduce their interest... if their account book id already dealing with bad loans then chances of sharp reduction of interest rate is low.. moreover central bank reduction doesn't automatically means other bank will lower their interest rate , it's on their discretion... but they will likely follow the suit as it will increase their base..

 

[OTTOMAN]

View attachment 256260

I think she likes the dog.

 

[saurav]

Interest rate 6% ? Economy does not seem to be growing that fast . Is deficit under total control ?

 

[Hurter]

I think she likes the dog.

And and her dog looks better than her really baba.

 

[Dubious]

And and her dog looks better than her really baba.

I see no difference

 

[Hurter]

I see no difference

At least ye pure kutta hai... Zardari mai milawat hai

 

[Blue Marlin]

This is a good move for businessmen, industrialist and all. This should kick off an economic boom on the current infrastructure while CPEC is being built. People would want to take advantage of the low rates to start new business ventures and expand existing ones, etc, etc.

Another interesting part is to notice how closely the Western economic houses like the Bloomberg, etc are watching Pakistan's economy. That means one thing and one thing only, they expect this market to grow to the top 3 most profit returning markets, and that's why so much monitoring. The second electricity becomes available for the larger part of the day and Karachi and Baluchistan peace is established, you'll see significant amounts of investments coming in shortly.

agreed. small and medium sized businesses will be the biggest beneficiary of the cut. they can take out a loan and invest their own business to increase productivity and can eventually export their products and services to increase business. also business from neighbouring countries may want to establish their business in Pakistan to benefit from the interest cut. also foreign investors will give Pakistan another look.