SBP surprises with hold on key policy rate at 12pc

[ghazi52]

SBP surprises with hold on key policy rate at 12pc​

Dawn.com
March 10, 2025

The State Bank of Pakistan (SBP) announced on Monday that it has decided to keep the policy rate unchanged at 12 per cent, assessing the current real interest rate to be adequately positive on the forward-looking basis to sustain the ongoing macroeconomic stability.

The central bank’s policy rate, after being slashed by 1,000bps from 22pc since June 2024 in six intervals, now stands at 12pc.

February inflation stood at a near-decade low of 1.5pc, largely due to a high base a year ago. A Reuters survey of 14 analysts suggests that the central bank may further reduce rates, with a median forecast for a cut of 50 bps. Of the 10 analysts expecting a rate cut, three estimated its size at 100 bps, one at 75 bps, and six at 50 bps. The rest saw no change.

According to a notification issued by the State Bank of Pakistan today, the Monetary Policy Committee (MPC) decided to keep the policy rate unchanged at 12pc, noting that inflation in February turned out to be lower than expected, mainly due to a drop in food and energy prices.

Source:
https://www.dawn.com/news/1897015/sbp-surprises-with-hold-on-key-policy-rate-at-12pc

 

[ghazi52]

'Interest rates reduced significantly, further decrease possible': Finance Minister​

Aurangzeb reports that Rs870 billion worth of purchases were made during Eidul Fitr, compared to Rs720 billion in 2024

News Desk
April 05, 2025


Finance Minister Muhammad Aurangzeb has stated that there has been a significant reduction in interest rates and, in his opinion, there is room for further reduction.

In a press conference held in Islamabad, he said that economic stability had been achieved in the country, which is crucial for economic development.

He also noted significant improvements on the external front, with remittances expected to exceed 36 billion dollars this year.

The Finance Minister mentioned that exports are also increasing, and by the end of June, the country’s foreign exchange reserves will reach $13 billion.

He added that there are no difficulties in opening Letters of Credit (LCs) or transferring profits by companies abroad. On the domestic front, inflation has significantly decreased.

Muhammad Aurangzeb further said that the reduction in inflation should be passed on to the public, and the Economic Coordination Committee (ECC) is taking measures to address inflation.

The ECC has been closely monitoring inflation and has implemented new measures to control it.

He also commented on the significant reduction in interest rates, stating that there is still room for further reduction.

Reports from PWC and the Overseas Chamber of Commerce show increased investor confidence, with local investors also making investments and the stock market seeing an increase in investment.

The Finance Minister reported that Rs870 billion worth of purchases were made during Eidull Fitr, compared to Rs720 billion last year.

He highlighted a 14% increase in cement production and a 40% increase in car sales, along with a 30% rise in motorcycle sales during the first half of the year.