KARACHI: The unexpected fall in inflation pushed the real interest rate to 10.1 per cent, creating ample room for the State Bank of Pakistan (SBP) to introduce a significant cut in its policy rate, which would be the fifth consecutive decline since June.

The real interest rate is the difference between the nominal policy rate and inflation. It’s the actual return on a loan or bond.

The central bank has brought down the interest rate to 15pc from an unprecedented 22pc in four intervals since June, but it was unable to chase the steep fall in the Consumer Price Index, which hit a 78-month low of 4.9pc in November. The government and the........

© Dawn Business