State Bank slashes interest rate by 0.5%
Security situation improving, investors' confidence on the rise, SBP reduces interest rate by 0.5%
KARACHI: (Dunya News) – State Bank of Pakistan (SBP) has on Saturday slashed the interest rate by 0.5%. Previously the interest rate on loan was 6.5% but now it has been set at 6%. Amid the improving security situation and rising investors’ confidence in the economy, the central bank has reduced the interest rate by 0.5%, reported Dunya News.
Inflation rate has also been recorded at 1.7% in the month of August. In view of the lowering oil prices in the international market, the inflation rate is expected to remain at 5.5% this year.
According to SBP, inflation rate might see a rise if the government, intending to lower the subsidies, sets a higher per unit price of electricity. The central bank also feared that the low rates of commodities may impact the production and can negatively affect the economy.
Discussing the balance of payments, the SBP said that due to the dropping prices of oil in the international market and rising remittances, the balance of payments has improved.
The central bank says that the heavy industry is expected to progress with government’s focus on the energy projects while China-Pakistan Economic Corridor (CPEC) will help improve the environment for investment.
