Karachi: The State Bank of Pakistan (SBP) on Tuesday provided notification of a 1.5% reduction in the interest rate — bringing it down to 11% — in a bid to secure business persons and traders against the impact of the novel coronavirus pandemic, a news source reported. The central back further stated that it wanted to facilitate business owners who rely on loans acquired from the commercial banks to run their ventures.
As per report, the Monetary Policy Committee (MPC) also acknowledged the uncertainty brought forth by novel Coronavirus, which is why it sliced the interest rate policy by 150 basis points. Last week, the SBP had reduced the interest rate by 75 basis points and fixed it at 12.5%.
The novel coronavirus pandemic has brought volatility and uncertainty in the global financial markets and has caused the global oil prices to plummet. The SBP statement said that ‘with the domestic deceleration in food prices and significant decline in consumer price expectations, the outlook for inflation in Pakistan has therefore improved, paving the way for today’s rate cut’.
Meanwhile, the Islamabad Chamber of Commerce and Industry (ICCI) has requested the government to reduce the interest rate to 5% percent in order to guard the businesses against the impact of novel coronavirus pandemic.