State Bank of Pakistan. — File Photo
KARACHI: Announcing the monetary policy on Friday, the State Bank slashed the policy interest rate by 50 basis points to 9 per cent.
The rate was revised primarily in the wake of declining inflation and poor credit off-take by the private sector.
According to the SBP, power shortages and poor security continue to be strong impediments to growth. The absence of foreign financial inflows and high fiscal borrowings from the banking system were seen as formidable economic challenges.
“The central bank decided to place a higher weight to declining inflation and low private sector credit relative to risks to the balance of payments position,” the SBP said.