Skip to content
Search

Latest Stories

Pakistan central bank slashes interest rate to 17.5 per cent as inflation eases

Pakistan’s annual consumer price inflation rate slowed to 9.6 per cent in August from a multi-decade high of nearly 40 per cent in May 2023.

Pakistan central bank slashes interest rate to 17.5 per cent as inflation eases
Pakistan’s annual consumer price inflation rate slowed to 9.6 per cent in August from a multi-decade high of nearly 40 per cent in May 2023

PAKISTAN’S central bank cut its key policy rate by a bigger than expected 200 basis points to 17.5 per cent last Thursday (12), the third straight reduction since June as the country looks to spur growth as inflation eases.

“The pace of this disinflation has exceeded the committee’s earlier expectations,” the State Bank of Pakistan said. In a monetary policy statement, it attributed this to a delay in the implementation of planned increases in energy prices and falling global oil and food prices.


Last Thursday’s move follows cuts of 150 basis points (bps) in June and 100 bps in July that have taken the rate down from an all-time high of 22 per cent – set in June 2023 and left unchanged for a year.

Pakistan’s annual consumer price inflation rate slowed to 9.6 per cent in August from a multi-decade high of nearly 40 per cent in May 2023.

“The MPC assessed the real interest rate to still be adequately positive to bring inflation down to the medium-term target of five per cent – seven per cent and help ensure macroeconomic stability,” the bank said. “This would be essential to achieve sustainable economic growth over the medium term,” it said.

The bank said there was a possibility that average inflation for the fiscal year ending 2025 would fall below the previous forecast of 11.5 per cent to 13.5 per cent.

Economic indicators have stabilised since last summer when the country came close to a default before a last-gasp bailout from the International Monetary Fund (IMF). However, concerns have risen once again, with the global lender’s board yet to approve a staff level agreement struck in June for a new, $7 billion (£5.31bn), three-year programme that includes the requirement that Pakistan boost its external financing.

The central bank said its forecasts were partially contingent on “timely” foreign inflows as well as continued fiscal prudence by the government.

The government initially said it expected the board approval in August, and later said it was likely in September.

However, Pakistan central bank governor Jameel Ahmad told analysts in a briefing following last Thursday’s rate cut that external financing requirements had been met, and that he still expected the IMF board’s programme approval in September.

He added that he expected Pakistan’s foreign exchange reserves to increase above $12bn (£9.11bn) by March, up from $9.5bn (£7.21bn) currently, as inflows would increase after the IMF approved Pakistan’s programme.

More For You

UK business district
The Canary Wharf business district including global financial institutions in London.
Getty Images

Economy grew 0.7 per cent in Q1 2025, fastest in a year

THE UK economy expanded at its fastest pace in a year during the first quarter of 2025, driven by a rise in home purchases ahead of a tax deadline and higher manufacturing output before the introduction of new US import tariffs.

Gross domestic product rose by 0.7 per cent in the January-to-March period, the Office for National Statistics (ONS) said, confirming its earlier estimate. This was the strongest quarterly growth since the first quarter of 2024.

Keep ReadingShow less
Rosneft in early talks to sell India refinery stake to Reliance

Reliance Industries chairman Mukesh Ambani (Photo: Getty Images)

Rosneft in early talks to sell India refinery stake to Reliance

RUSSIAN oil major PJSC Rosneft Oil Company is in early discussions with Reliance Industries to sell its 49.13 per cent stake in Nayara Energy, an Indian energy company that operates a 20-million-tonnes-per-year oil refinery and 6,750 petrol pumps, sources familiar with the matter said.

The deal, if finalised, would see Reliance overtake state-owned Indian Oil Corporation (IOC) to become India’s largest oil refiner. It would also provide Reliance with a significant expansion in fuel retailing, where it currently holds a relatively small presence.

Keep ReadingShow less
modi-trump-getty
Trump shakes hands with Modi during a joint press conference at Hyderabad House in New Delhi on February 25, 2020. (Photo: Getty Images)
Getty Images

Key issues in India, US trade talks

TRADE talks between India and the US have hit a roadblock over disagreements on duties for auto components, steel and farm goods, Indian government sources said to Reuters, dashing hopes of reaching an interim deal ahead of president Donald Trump's July 9 deadline to impose reciprocal tariffs.

Here are the key issues at play:

Keep ReadingShow less
Anil Agarwal

Vedanta Resources, which is based in the UK and owned by Indian billionaire Anil Agarwal, has been working on reducing its debt. (Photo credit: Getty Images)

Getty Images

Anil Agarwal’s Vedanta Resources signs £438 million refinancing deal

VEDANTA LTD said on Thursday that its parent company, Vedanta Resources, has signed a loan facility agreement worth up to £438 million with international banks to refinance existing debt.

The refinancing move, where old loans are replaced by new ones, often at better terms like lower interest rates, has led ratings agencies such as S&P Global Ratings and Moody's to upgrade their outlook on the company this year.

Keep ReadingShow less
Trump-Getty

Trump said that while deals are being made with some countries, others may face tariffs.

Getty Images

Trump says major trade deal with India may be finalised soon

US PRESIDENT Donald Trump on Friday said a "very big" trade deal could be finalised with India, suggesting significant movement in the ongoing negotiations between the two countries.

“We are having some great deals. We have one coming up, maybe with India. Very big one. Where we're going to open up India," Trump said at the “Big Beautiful Bill” event at the White House.

Keep ReadingShow less