https://arab.news/zpzg4
- Monday’s monetary policy meeting was the first since Pakistan’s government passed its budget and reached an agreement with IMF for a $7 billion loan
- The program includes tough measures such as increased tax on farm income and raising electricity prices, prompting concern among poor and middle class
KARACHI: Pakistan’s central bank cut the key interest rate by 100 basis points to 19.5 percent, its governor said on Monday, a decision in line with expectations of investors and analysts.
The widely forecast move followed the bank’s decision to cut rates — from a record high of 22 percent — for the first time in nearly four years at its last meeting in June, as it signalled that soaring inflation was tempering.
Monday’s monetary policy meeting was the first since Pakistan’s government passed its budget and reached an agreement with the International Monetary Fund (IMF) for a $7 billion, 37-month loan program.
The program includes tough measures such as increased tax on farm income and raising electricity prices, prompting concern among poor and middle class Pakistanis grappling with the risk of further inflation and the prospect of higher taxes.
However, inflation has slowed in recent months. Pakistan’s consumer price index (CPI) rose 12.6 percent in June from a year earlier, giving the central bank room to cut rates, analysts said.