SBP slashes policy rates by 100bps to 8.5 percent

KARACHI: The central bank cut its key policy rate for the second time in two months on Saturday, in line with the market’s expectations, amid signs of cooling inflation and a contained fiscal deficit.
In a move that had been widely expected, the State bank of Pakistan announced a 100 basis point cut in the discount rate to 8.5 percent, aiming at adding momentum to an economic recovery that is proving slow to take off due to the looming energy crisis in the country.
In a surprise move, over an hour before the central bank’s announcement, Finance Minister Ishaq Dar disclosed the 100 basis point cut, casting doubts on the independence of the central bank.