SBP Governor Hints At Further Reduction in Interest Rate Due to Declining Inflation

The State Bank of Pakistan (SBP) Governor Jameel Ahmed has indicated a further cut in the monetary policy rate due to the declining inflation rate which has been positively influencing the monetary policy committee’s decisions. During a media briefing in Karachi today, he said the government’s financial standing has improved significantly which has also helped reduce the need for banks to repay their loans early and ease pressure on public borrowing. The central bank governor announced that five digital banks have been licensed, with full digital banking services expected to commence by 2025. One of these banks will begin operations within the next three months. This shift is part of the regulator’s efforts to enhance the financial ecosystem, including expanding SME financing, which is estimated to grow from Rs. 550 billion to Rs. 1.1 trillion over the next five years. Jameel also confirmed that Pakistan’s foreign exchange reserves have reached $10 billion after receiving a $1 billion tranche from the International Monetary Fund—sufficient to cover two months of imports. He reassured that the supply of dollars remains stable and that there is no pressure on the rupee in the forex market. The governor also noted that online fraud has increased within banking systems. SBP has issued warnings to banks to enhance their cybersecurity measures, he added.