KARACHI: The State Bank of Pakistan (SBP) on Tuesday cut its key interest rate by 75 bps to 12.50pc, the first reduction in four years, citing a declining inflationary pressure, media reported on Tuesday.
However, inflation has lately registered a decline, which the central bank said in a statement was mainly due to the global slowdown following an oil price dip.
The SBP announced that it will provide loans to health facilities on 3% markup to counter coronavirus outbreak. The SBP declared that inflation rate will come down in the coming months while the prices of petroleum products will also decrease.
Local businesses and exporters have lately been protesting at high borrowing costs, which they said was harming investment.
Earlier, the SBP left the interest rate unchanged at 13.25 per cent. The SBP announces a target rate every two months, which serves as the benchmark interest rate for overnight funds in the interbank market. It is one of the tools the central bank uses to ensure price stability in the economy.