The State Bank of Pakistan has announced further easing of interest rates in the context of gradual reduction in inflationary pressure and economic recovery. According to the announcement issued after the monetary policy committee meeting of the state bank, the interest rate has been reduced by 50 basis points, after which the policy rate has been reduced to 10.5 percent from 11 percent.

State Bank officials say inflationary trends have stabilized in recent months, creating room for a cautious easing of monetary policy. It should be remembered that in the meeting held on May 5 this year, the interest rate was reduced by one percent to 11 percent.

According to economists, this reduction in interest rates will help reduce business costs. According to economist Dr. Fahad Iqbal, “The reduction in interest rates will provide cheap credit to industries, which is expected to increase investment and employment opportunities; however, it will be necessary to keep an eye on inflation.”

Analysts say that if the economic indicators continue to show improvement in the same direction, the monetary policy may become more accommodative in the coming months.