On Monday, Pakistan’s central bank announced that it reduced its key interest rate by 2% to 13%. This is the fifth time they have lowered the rate since June, trying to help the slow economy as inflation decreases. With this change, Pakistan has made some of the biggest interest rate cuts this year among countries with similar situations, except for places like Argentina.
The country is facing tough challenges in recovering economically but got a boost from a $7 billion loan from the International Monetary Fund (IMF) in September. All 12 experts who were asked predicted this 2% cut after the inflation rate dropped to 4.9% in November, which was lower than expected and much less than the 40% high recorded in May last year.
This latest cut follows previous reductions of 1.5% in June, 1% in July, 2% in September, and a record 2.5% in November. Overall, the interest rate has been cut by an impressive 9% since June, coming down from a record high of 22% that had remained unchanged for a year.
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