Interest rate cut hinges on flood damage assessment, IMF review: SBP governor

State Bank of Pakistan (SBP) Governor Jameel Ahmad has linked any potential reduction in the policy interest rate to the assessment of flood-related damages and the outcome of the IMF’s ongoing review.

Speaking to foreign media, the governor said that overall inflation is expected to remain within the central bank’s target range, though it may temporarily exceed the 5–7 per cent target in the short term.

He noted that the tight monetary policy has played a key role in bringing down inflation, adding that maintaining such a stance will continue to yield positive results.

However, any decision to ease interest rates will depend on the extent of flood losses and the IMF’s evaluation.

Jameel Ahmad further stated that the coordination between monetary and fiscal policies is delivering encouraging results for the economy.