In a statement, SBP’s Monetary Policy Committee (MPC) announced that the decision was taken in light of reduction in growth and inflation expectations. “The MPC decided at its emergency meeting today, to cut the policy rate by a further 200 basis points to 9 per cent. This reduces forward looking real interest rates (defined as the policy rate less expected inflation) to around zero, which is about the middle of the range across most emerging markets,” the statement read. This is a much deeper recession than the 0.07 per cent contraction during the global financial crisis in 2009,” it stated. “The economy is expected to contract by -1.5 per cent in FY20 before recovering to around 2 per cent growth in FY21.

Source: Pakistan Today April 16, 2020 13:34 UTC