PM Shehbaz eyes single-digit interest rate to boost economy

ISLAMABAD: Prime Minister (PM) Shehbaz Sharif on Thursday hoped that the interest rate would be brought to a single digit gradually, saying that it would have a positive impact on the economy, ARY News reported.

Addressing the federal cabinet meeting, PM Shehbaz welcomed the State Bank of Pakistan’s (SBP) decision to reduce the policy rate by 200 points, lowering it from 19.5 percent to 17.5 percent.

The prime minister said that the interest rate could be decreased to a single digit gradually and added that the move would benefit agriculture, industry, and the overall economy.

The prime minister said that the policy rate could gradually decrease to single digits, in line with the country’s inflation rate.

Speaking on the ongoing discussions with the International Monetary Fund (IMF), he noted that the negotiations were progressing smoothly.

He further highlighted that, as in the past, friendly nations had once again committed to assisting Pakistan during this challenging time. With these developments, Pakistan has now met the prerequisites to secure loans from the IMF.

“Our friendly and brotherly countries have come all the way to support us again,” he said.

He thanked the ministry of finance, other concerned departments and the ambassador of Pakistan to China who played important role in getting the support from the brotherly countries.

The prime minister stressed that after achieving the goal of macro economic stability, the government will now take measures to boost GDP growth of the country.

As regards the Israel’s continued atrocities over Palestinians, the prime minister demanded the global community to stop Israel from doing war crimes in Palestine.

Condemning the Israel’s barbarism in strong words, the prime minister said that today, the Israeli forces had killed six staff members of United Nation relief mission in Palestine while it also martyred 17 more Muslims in Gaza.

Earlier in the day, the SBP made a major cut by reducing 200 basis points in its monetary policy announced for the next 90 days

The central bank slashed the interest rate by two percent to 17.5% in the monetary policy announced today.

The Monetary Policy Committee (MPC) of the central bank met today to fix the policy rate for the next one-and-half month.

Analysts were expecting that the committee will continue monetary easing between 150-200bps on a lower inflation outlook.

The state bank stated that the inflation went down to single digit in August at 9.64 percent. “The inflation continuously going down”.

The central bank said that the growth in current year likely to remain 3.5 percent.