Pakistan's Strategic Rate Cut Spurs Economic Revival

Pakistan's central bank reduced its key policy rate by 250 basis points to 15%, marking the fourth consecutive reduction since June. This decision, made as inflation subsides, aims to boost economic growth. Most analysts had anticipated a 200 basis points cut following the sharp decline from a nearly 40% inflation rate recorded in May 2023.

Pakistan's central bank made a significant move by reducing its key policy rate by 250 basis points on Monday, bringing it down to 15%. This marks the fourth consecutive cut since June, as efforts continue to revitalize the slowing economy amid easing inflation.

A recent Reuters poll had indicated expectations for a 200 basis points cut, aligning with the decline in inflation from a staggering multi-decade high of nearly 40% in May 2023. The decision underscores the necessity to foster economic growth.

Analysts assert that the rate reduction is crucial for bolstering growth, considering the current economic climate. The central bank's action reflects a strategic response to the evolving challenges facing Pakistan's economy.

(With inputs from agencies.)