Pakistani Central Bank Rate Cut – Currency Thoughts
Pakistani Central Bank Rate Cut
January 27, 2025
Pakistan’s central bank policy rate had been as low as 7.0% from June 2020 until September 2021 and as high as 22% from June 2023 until June 2024 after Pakistani CPI inflation peaked at 38% in May 2023. Today’s rate cut of one percentage point to 12.0% was the sixth reduction since June 2023 but only half the size of the prior cut in December. Total consumer price inflation has meanwhile receded to an 80-month low of 4.1% as of last month. According to a statement today from the State Bank of Pakistan, the Monetary Policy Committee “assessed that the real policy rate needs to remain adequately positive on a forward-looking basis to stabilize inflation in the target range of 5 – 7 percent.” Such suggests only a limited additional scope for more cuts.
Copyright 2025, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: State Bank of Pakistan
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