Pakistan slashes interest rates to 10 year low

Monday, 26 January 2015 00:13 - - {{hitsCtrl.values.hits}}

AFP: KARACHI: Pakistan’s central bank on Saturday 24 January slashed the basic interest rates by 1 % to a 10-year low on the back of improving economic indicators at home. Addressing a press conference in the country’s financial capital Karachi, the Governor of the State Bank of Pakistan (SBP) Ashraf Mehmood Wathra said the discount rate was being lowered by 1% to 8.5%. “Central board of directors has decided to reduce the SBP policy rate by 100 basis points from 9.5% to 8.5% effective from 26 January,” he said. The Central Bank also revised its inflation rates projection for the current fiscal year from 4.5 to 5.5%, compared to an earlier target of 8%. Reduction in inflation rates was the result of a staggering drop in the global oil and other commodities prices. “Given the reduction in domestic oil prices and its second round impact, such as on transport services, inflation is likely to decrease further going forward,” Wahtra said. Pakistan has successfully completed the International Monetary Fund’s (IMF) 4th and 5th reviews linked to a $ 6.6 billion loan programme in November leading to release of $ 1.1 billion in December.

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