Pakistan's Bold Economic Revival: Central Bank Slashes Rates

Pakistan's central bank has aggressively cut its key policy rate to 13%, marking a significant move to stimulate the economy. This is the fifth consecutive rate cut since June, supported by easing inflation and a $7 billion International Monetary Fund facility. The total rate reduction stands at 900 basis points.

In a decisive move to revive the economy, Pakistan's central bank slashed its key policy rate by 200 basis points, bringing it down to 13%. This action marks the fifth consecutive reduction in interest rates since June, a pattern seen as among the most aggressive policy easing by emerging market central banks this year.

This monetary policy has been buoyed by easing inflation, which dipped to 4.9% in November from a staggering high of 40% in May last year. Analysts had accurately predicted the 200 bps cut, following a year marked by notable fluctuations in inflation metrics.

Pakistan's economic strategy finds further support in a $7 billion loan facility from the International Monetary Fund, aimed at stabilizing the country's fiscal parameters. The central bank's successive rate cuts, totaling 900 bps since June, aim to foster growth amid challenging recovery conditions.

(With inputs from agencies.)