SBP falling off policy rate by 200bps to 9%

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After a long span of time State Bank of Pakistan announced to decrease interest rate by 2% which becomes 9% after immediate effect. SBP took the decision in the light of slow growth and to cumbersome the inflation rate.  “The MPC decided at its emergency meeting today to cut the policy rate by a further 200 basis points to 9 per cent.”

Many economist in the past passed remarks on exorbitant rate that  this has to be decrease to single digit which will necessary to a boost business sector.  Mostly emerging markets like Sirilanka, Bangladesh Malaysia have a rate around 5% to encourage international trade.

Officials said, step is taken to reduce unemployment and increase growth, including by easing borrowing costs and the debt service burden of households and firms, while also maintaining financial stability. It would also help ensure that economic activity is better placed to recover when the pandemic subsides,” it added.

Few days ago SBP also offers a loan to business sector to stop doing downsizing. which results in high unemployment. they offers a loan on 5% to pay salaries of staff instead of firing from job which is a good step under corona virus catastrophe.

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