From 11 percent, the State Bank of Pakistan (SBP) slashed its key interest rate by 2 percent to 9 percent. The central bank has slashed rates for the third times since March 17 when the rate was 13.25 percent. The move is aimed at stimulating economic activity.
In the wake of the coronavirus pandemic, the SBP’s Monetary Policy Committee (MPC) had noted the worsening outlook for domestic and global economic activity. In response to the evolving economic impact of the pandemic, SBP’s MPC had reaffirmed that it was ready to take whatever further actions become necessary.
Other measures recently taken by the SBP to support the economy would be complemented by this rate cut, the MPC highlighted. The measures include the one-year extension in principal payments, doubling of the period for rescheduling of loans from 90 to 180 days, concessional financing to companies that do not lay off workers, and concessional financing for hospitals and medical centers incurring expenses to combat the coronavirus pandemic.
