Experts see a 1pc to 2pc rate cut
LAHORE/KARACHI – As the central bank’s Monetary Policy Committee is set to meet June 10 amid rapid decline in inflation, an overwhelming majority of experts are expecting a reduction in borrowing costs, as Pakistan currently has a record high 22 per cent interest rate.
That’s why some of circles are even suggesting that the State Bank of Pakistan must go for 3pc rate cut to trigger economic activity in the country where higher inflation, shrinking purchasing power and fewer job opportunities have created an unprecedented cost of living crisis. It was not the first time that the finance minister has indicated at rate cuts, as he previously said that the rate cut cycle would start in June.The reason is simple: The consumer price index has been witnessing a consistent decline for the last five months – from January to May – as it dropped to 30-month low of 11.8 per cent last month.
Earlier, the CPI had touched a record high in May 2023 by clocking at 38.0pc, as Pakistan is grappling with an economic crisis triggered and sustained by currency devaluation, expensive imports and higher interest rates.Although the Federal Reserve isn’t expected to US interest rates till September given the trend witnessed in inflation data, the Bank of Canada earlier this week became the first among the G7 countries to slash the rates by 25 percentage points from 5 per cent to 4.75 per cent.
State Bank Of Pakistan CPI Inflation US Interest Rates Eurozone Interest Rates
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