Pakistan's Central Bank Slashes Rates to Revive Economy

Pakistan's central bank has reduced its key policy rate by an additional 200 basis points to 13%, marking the fifth consecutive cut since June. This move aims to stimulate the economy amid easing inflation and is the most aggressive among emerging markets.

The State Bank of Pakistan has announced a significant cut to its key policy rate, slashing it by 200 basis points to 13% on Monday. This marks the fifth consecutive reduction since June, as the nation intensifies its efforts to reinvigorate a lethargic economy amid easing inflation rates.

A survey by Reuters revealed unanimous anticipation of the 200 bps rate cut, mirroring predictions by all 12 surveyed analysts. This strategic adjustment is a clear indication of Pakistan's commitment to fostering economic recovery and responding to market expectations.

Pakistan stands out for its aggressive rate-cutting measures this year among emerging market central banks, with only exceptions such as Argentina displaying a more radical approach. This ongoing easing cycle underscores the pressing need to bolster economic momentum as inflation shows signs of stabilization.