State Bank of Pakistan slashes monetary policy rate to 9pc.

In a surprise move, the State Bank of Pakistan (SBP) on Thursday cut the benchmark interest rate by 200 basis points to a 17-month low at 9 percent to help businesses and people to avert default on loans and help banks to stave off losses.

With this, the central bank has cut the policy rate by a cumulative 425 basis points in the past one month to ease the pressure of interest payment as a majority of businesses stay closed under the lockdown due to the coronavirus pandemic. Otherwise, the central bank's monetary policy committee (MPC) meets after every two months to determine the interest rate corridor.

Earlier, the SBP allowed businesses and people to defer payment of bank loan principal for one year, but they would continue to pay interest money against the loans.

Global and domestic economic growth outlooks have become negative in response to the Covid-19 crisis. The fast worsening situation led the MPC to hold an emergency meeting to cut the rate...

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