The State Bank of Pakistan (SBP) at its Monetary Policy Committee meeting on Thursday decided to cut the country's interest rate from 100 bps to 7%. This is the fifth time the central bank has cut interest rates of the last 100 days.
A statement issued by the SBP said the decision was taken in the light of a better view of inflation, "while the domestic economy continues to fluctuate and the risk of growth has increased."
The decline is the fifth since the coronavirus epidemic hit the global economy, with an overall decline of 625 basis points.
The committee said the threats to the global outlook have been exacerbated and the path to recovery is uncertain. The MPC also noted that in an update of the Global Economic Outlook (WEE) released yesterday, the IMF has raised its global growth forecast for 2020 to be -4.9% higher than in April, 1.9 percent. The percentage has been reduced, and a much more gradual recovery is predicted. First expected, "the statement reads.
The MPC added that the economy is expected to recover slowly in the next financial year as the lockdown will be smooth. However, 'rehabilitation will depend on criticism of the evolution of epidemics, both in Pakistan and abroad.'
The committee also noted that in recent weeks there has been an increase in SBP initiatives such as the provision of subsidized financial assistance to support job security and health, as well as regulatory provision for credit assistance. Steps.
'Together, growth and employment must be supported in response to this strong and data-driven fiscal policy, while anchoring inflation expectations and maintaining fiscal stability," the statement said.'
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