ISLAMABAD: Pakistan’s Prime Minister Shehbaz Sharif has welcomed the central bank’s decision to cut the policy rate by 250 basis points, saying the move would help boost the country’s business activities and enhance employment opportunities, state-run media reported on Tuesday.
Pakistan’s central bank slashed its key policy rate by 250 basis points to 15 percent on Monday for a fourth straight reduction since June. The development takes place as Islamabad attempts to revive a sluggish, fragile $350 billion economy as inflation eases.
Monday’s move follows cuts of 150 bps in June, 100 bps in July, and 200 in September that have taken the rate from an all-time high of 22 percent, set in June 2023 and left unchanged for a year. It takes the total cuts to 700 bps in under five months.
“Prime Minister Shehbaz Sharif says the reduction in policy rate will enhance business activities, exports and employment opportunities in the country,” state broadcaster Radio Pakistan reported.
Sharif was chairing a meeting of the ruling Pakistan Muslim League-Nawaz’s (PML-N) parliamentary party on Monday when he touched upon the central bank’s move. The premier noted that inflation has reduced from an alarming 38 percent in May 2023 to 7 percent at present.
The Pakistani premier informed members of the PML-N parliamentary party about his visit to Saudi Arabia and Qatar last week, saying that “a new chapter” has been added to the Pakistan-Saudi investment partnership.
“The Saudi leadership assured all kinds of support for the stability and development of Pakistan’s economy,” Sharif said according to the state broadcaster.
The Pakistani prime minister also informed the lawmakers about his visit to Qatar, saying that the Qatari leadership also assured an increase in investment for Pakistan. He said talks were held between both sides on giving “a practical shape” to projects worth $3 billion in Pakistan.
“He said Qatar will invest in various sectors including aviation, hoteling, information technology and energy sectors in Pakistan,” the state broadcaster said. “Shehbaz Sharif said the government is taking steps on a priority basis to facilitate investment and increase foreign investment in Pakistan.”