State Bank of Pakistan cuts key interest rate

The State Bank of Pakistan (SBP) has decided to reduce the key interest rate to 20.5% in preparation for the upcoming annual budget. This decision comes after recent data showed a decline in inflation to 11.8% in May, marking the lowest rate in 30 months. The SBP made the announcement following a meeting of its Monetary Policy Committee (MPC) today, during which they deliberated on the current economic conditions. The SBP highlighted the significant decrease in inflation for May, which surpassed expectations.

This rate cut is a strategic move by the SBP to stimulate economic growth and encourage borrowing and spending. With inflation on the decline, the SBP aims to support businesses and consumers by making borrowing more affordable. Lower interest rates can lead to increased investments and overall economic activity, which can benefit the country's economy in the long run.