Karachi:
The State Bank of Pakistan is going to declare its monetary policy on 30 July, and currently everyone is eyeing whether the interest rates will be further reduced or maintained.
As an economist, in my opinion, it is intelligent to change the interest rates in the current situation, Pakistan has seen a significant decline in interest rates in recent months, which has come down from 22 percent to 11 percent in May 2025.
This is not just a shortage, but a clear change in the policy. Although it gave relief to lenders and supported the economy, its effects take time to come to the ground.
Recent year -year decline in inflation is mainly due to the “base effect”, not due to any fundamental improvement. Factors, such as possible increase in energy prices, global commodity prices, and decrease in dispatch, may again re -come up to 7 to 9 percent in the coming months.
State Bank’s long target of inflation is 5 to 7 percent, which must be placed in a positive rate of positive rate between 3 and 5 percent to control imports, keep the currency stable and control the current account deficit.
