From Zeeshan Mirza
KARACHI: The State Bank of Pakistan (SBP) on Tuesday slashed its key interest rate by 150 basis points to 11 per cent in the face of the escalating coronavirus crisis. The Monetary Policy Committee (MPC) of the country’s central bank in an emergency meeting decided to cut the benchmark interest rate for a second time in a week amid “considerable uncertainty about how the Coronavirus outbreak would impact the global economy and Pakistan,” the SBP said in a Twitter statement.
It said substantial new information on global and domestic developments has become available since the last MPC meeting.
“The developments discussed during the meeting imply that the outlook for growth and inflation in Pakistan is likely to be revised down further.”
Earlier, on March 17, the State Bank had cut its policy rate by 75 basis points to 12.5o per cent.
The central bank’s Monetary Policy Committee (MPC) cut the benchmark interest rate after taking stock of “the dominant development” of the outbreak of the coronavirus pandemic. The virus spread has “precipitated a slowdown in world demand and volatility in global financial markets, as well as a steep fall in global oil prices.
Together with the domestic deceleration in food prices and significant decline in consumer price expectations, the outlook for inflation in Pakistan has therefore improved, paving the way for today’s rate cut,” read a statement issued by the SBP.