ISLAMABAD: In a recent briefing, State Bank of Pakistan (SBP) Governor Jameel Ahmad informed analysts that Pakistan’s key bilateral partners have assured the International Monetary Fund (IMF) of continued debt rollovers for the entire duration of Islamabad’s current IMF bailout program. This commitment from Pakistan’s allies aims to provide critical support to the country’s economic stability during the IMF program, reducing immediate pressure on its foreign reserves and strengthening financial confidence amid challenging economic conditions.
Governor Ahmad’s announcement followed a decision by the Monetary Policy Committee (MPC) of the SBP to lower the key interest rate by a substantial 250 basis points. The rate cut, which reduced the policy rate from 17.5% to 15%, marks the fourth consecutive reduction since June 2024, as the central bank aims to stimulate economic growth by easing financial conditions. This policy shift is intended to counteract the effects of previous high rates on businesses and households, making borrowing more affordable and encouraging investment.
Analysts interpret these consecutive rate cuts as a strategic response to subdued inflationary pressures and a cautious attempt to bolster the economy. The central bank’s commitment to a balanced approach, with support from international partners, is seen as a positive step towards restoring economic stability while maintaining the essential conditions of the IMF agreement.
