Pakistan cuts interest rates for first time in five years

Central bank says growth of exports and remittances bolsters foreign exchange reserves

Map of Pakistan

Pakistan’s central bank cut its key policy rate by 150 basis points to 20.5% on June 10, as inflation slowed significantly in May. This is the first rate cut the State Bank of Pakistan (SBP) has implemented in five years.

Headline inflation declined to 11.8% year on year in May from 17.3% in April, with core inflation declining to 14.2% from 15.6% over the same period.

The real interest rate remains “significantly positive”, the SBP said, saying it expected this to bring inflation down to its

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