LAHORE: The State Bank of Pakistan (SBP) will announce Monetary Policy Decision on July 25. SBP Governor Ashraf Mahmood Wathra will unveil the Monetary Policy Decision at a press conference at the State Bank building on I.I. Chundrigar Road, Karachi.
According to the experts, the central bank is mulling a further cut in discount rate in background of consecutive fall in the inflation rate.
The SBP Board of Directors earlier reduced the policy rate by 100 basis points (1 percent) to 7 percent which was the lowest rate in last 42 years. The new rates will be effective from May 25, 2015. Since November 2014, it is the fourth cut in the key discount rate – a rate at which the commercial banks borrow from the central bank. Initially, the central bank had cautioned against reducing inflation rates.
The SBP has lowered its key interest rate at a time when the federal government has decided to implement growth-oriented economic policies from the new fiscal year, beginning from July. The industrialists have long been demanding the central bank to set the interest rate below 8 percent aimed at reducing their cost of business. Finance Minister Ishaq Dar had already announced his government’s plan to introduce growth-oriented economic policies in the new budget, which will be unveiled on June 5, 2015.
The reduction in the policy rate will promote business activities in the country and reduce the input cost, Wathra said. However, he said there were other factors like availability and prices of gas and electricity that also affect industrial growth.
