The State Bank of Pakistan (SBP) cut the policy rate on Monday to 11 per cent, amid trade and industry sectors advocating for a significant cut.

The central bank’s policy rate, after being slashed by 1,000bps from 22pc since June 2024 in six intervals, previously stood at 12pc.

April inflation stood at a low of 0.3pc, largely due to a high base a year ago. The reduction is also primarily attributed to lower prices of key food staples such as wheat and its derivatives, onions, potatoes and certain pulses, as well as a cut in electricity and fuel charges. These items carry significant weight in the inflation basket — the Consumer Price Index (CPI) — meaning minor price changes can heavily influence the overall rate.

According to a notification issued by the SBP today, the Monetary Policy Committee (MPC) decided to cut the interest rate, noting that inflation in April turned out to be lower than expected, mainly due to a drop in prices of perishable food items and electricity and fuel charges.

According to the statement, core inflation declined in April, primarily reflecting favourable base-effect amid........

© Dawn Business