State Bank cuts key interest rate by 75 bps to 12.50pc

[Shah_Deu]

https://www.brecorder.com/2020/03/17/580847/580847/

State Bank cuts key interest rate by 75 bps to 12.50pc

• The SBP announced that it will provide loans to health facilities on 3% markup to counter coronavirus outbreak.
  
• The SBP declared that inflation rate will come down in the coming months while the prices of petroleum products will also decrease.
  
• Earlier, the SBP left the interest rate unchanged at 13.25 per cent.
  
  

By BR Web Desk on March 17, 2020

(Karachi) The State Bank of Pakistan (SBP) on Tuesday cut its key interest rate by 75 bps to 12.50%, the first reduction in four years, citing a declining inflationary pressure, media reported on Tuesday.

However, inflation has lately registered a decline, which the central bank said in a statement was mainly due to the global slowdown following an oil price dip.

The SBP announced that it will provide loans to health facilities on 3% markup to counter coronavirus outbreak. The SBP declared that inflation rate will come down in the coming months while the prices of petroleum products will also decrease.

Local businesses and exporters have lately been protesting at high borrowing costs, which they said was harming investment.

Earlier, the SBP left the interest rate unchanged at 13.25 per cent. The SBP announces a target rate every two months, which serves as the benchmark interest rate for overnight funds in the interbank market. It is one of the tools the central bank uses to ensure price stability in the economy.

 

[Shah_Deu]

SBP needs to bring interest rates even further down.

However, inflation in Pakistan is not just because of monitory policies but also trading-class which manipulates the prices.

In absence of price-control-regime and its vigourous application... common Paks will be kept on being subjected to artificial price hikes.

Also, the curb on imports doesn't go far enough...again it is the TradingMaffia which influences the policies and then there is SmugglingMaffia which cause $Blns in losses not only to the GoP/FBR but also to local industry.

GoP needs to get rid of the imported Undertaker/EconomicHitmen and reinstate Usad Umar!

Brother, I totally agree with you. Look at the how the US Treasury has brought down the interest rate to almost nil. Our rates could have been brought down even further to increase customer confidence. Looks like IMF is in total policy control!

 

[A.A. Khan]

Had told before Reza Baqir is an economic hitman from IMF. And the way Imran Khan has shown inability to govern anything is really baffling. The advisers that are surrounding him are really tearing down the country.

One adviser Zulfi Bukhari knowing of the dilapidated condition of the border facility and the implications of pilgrims carrying coronavirus stll forced the border guards to allow thousands into the country without screening. Other adviser IMF agentHafiz Shaikh is fecilitating Sugar mafia (hoarders responsible for artificial shortage in creating price rise).

He was crying in address to the nation that exports would be affected, someone explain to him how interest rates are damaging local investor climate.

 

[RIP Pak LAW]

Should had been down by atleast 1% not just 0.75%.

 

[blueazure]

Had told before Reza Baqir is an economic hitman from IMF. And the way Imran Khan has shown inability to govern anything is really baffling. The advisers that are surrounding him are really tearing down the country.

One adviser Zulfi Bukhari knowing of the dilapidated condition of the border facility and the implications of pilgrims carrying coronavirus stll forced the border guards to allow thousands into the country without screening. Other adviser IMF agentHafiz Shaikh is fecilitating Sugar mafia (hoarders responsible for artificial shortage in creating price rise).

He was crying in address to the nation that exports would be affected, someone explain to him how interest rates are damaging local investor climate.

lowering rates wont help , just saying

ppl are simply dumping equities and moving to safe havens

 

[Safriz]

Great were the General Zia's days when Pakistani banking system worked without compound interest.

 

[El Sidd]

I hope IMF approved it for the PTI government to lower the interest rates.

Concept of banking as understood in Pakistan is over. It is extinct.

Essentially bankrupt, the Government of Pakistan is just a capitalist experiment gone terribly wrong.

 

[Dark1]

Without consumption increase, these cuts have no meaning. No ones setting up industry or buying land in this environment.