ISLAMABAD: State Bank of Pakistan on Saturday announced to slash the interest rate. The new interest rate is 7 percent. Governor State Bank Ashraf Wathra announced the cut in interest at news conference.
The cut in interest rate will help to boost business activity and attract more investment in Pakistan, Wathra said.
The interest rate is at its lowest since August 1973.
The press release issued by SBP said:
SBP Board of Directors has taken the following decision effective from 25th May 2015:
1)Ceiling rate of the interest rate corridor is reducded by 100 basis points from 8.0 percent to 7.0 percent.
2) A new “SBP target rate” is set at 50 basis points below the ceiling rate. SBP will ensure that the overnight rate remains colse to this target rate. This will be the main Policy Rate of SBP.
3) Width of the interest rate corridor is reduced by 50 basis points from 250 to 200 basis points. Consequently, the floor rate is set at 5.0 percent.
SBP press release: