Interest rate likely to drop by 2pc in Pakistan

KARACHI: Due to the recent inflation decline, the interest rate is likely to decrease by two percent in Pakistan for the next financial year, ARY News reported on Saturday.

The State Bank of Pakistan’s Monetary Policy Committee will hold a meeting on June 10 to review the current economic situation.

Following the meeting, the State Bank will announce the new interest rate.

Currently, the interest rate across the country stands at 22 percent. However, due to a reduction in inflation, there is a possibility of a 2 percent decrease in the interest rate.

In April, State Bank of Pakistan (SBP) decided to keep the policy rate unchanged at 22 percent for the seventh consecutive session.

The announcement came after a meeting of the bank’s Monetary Policy Committee (MPC).

In a statement, the MPC said stressed on continuation of the current monetary policy stance to bring inflation down to the target range of 5 – 7 percent by September 2025.

“The macroeconomic stabilization measures are contributing to considerable improvement in both inflation and external position, amidst moderate economic recovery,” it stated. However, the committee viewed that the level of inflation is still high.

“At the same time, global commodity prices appear to have bottomed out with resilient global growth. The recent geopolitical events have also added uncertainty about their outlook. Moreover, the upcoming budgetary measures may have implications for the near-term inflation outlook,” the statement noted.