State Bank cuts interest rate by 2 per cent

ISLAMABAD (92 News) – The State Bank of Pakistan (SBP) on Thursday announced that it had cut the interest rate by 2 per cent to deal with the coronavirus pandemic. This means that it had slashed the interest rate by 200 basis points, bringing it down to 9% from 11%. The decision was announced in a Monetary Policy Statement released by the central bank in which it stated that the decision had been taken as the global and domestic outlook has further deteriorated due to the coronavirus pandemic. "The MPC was of the view that this action would cushion the impact of the Coronavirus shock on growth and employment, including by easing borrowing costs and the debt service burden of households and firms, while also maintaining financial stability. It would also help ensure that economic activity is better placed to recover when the pandemic subsides," read the statement from the SBP. The SBP noted that its measures would help provide support to the economy similar to the recent steps taken by the central bank, which included an employment scheme. According to the scheme, companies that do not lay off their workers will be able to avail loans at cheap interest rates.