Islamabad, August 13 — Finance Minister Muhammad Aurangzeb on Wednesday signaled that Pakistan’s policy rate could see further reductions this year, citing a decline in both average and core inflation.
Speaking at an event, he said: “Currently, the policy rate is at 11%. While the policy rate and the market-based exchange rate remain under the purview of the State Bank of Pakistan and the Monetary Policy Committee, my personal view is that there is still room to bring it down. I am hopeful that over the course of this year, we will see the rate moving south.”
The central bank kept its benchmark interest rate unchanged at 11% on July 30, despite market expectations for a cut, citing inflationary risks from higher energy costs. The next monetary policy announcement is scheduled for September 15.
Aurangzeb linked monetary easing to overall economic progress, stating that economic stability and national security go hand in hand. He highlighted positive indicators including a 60% surge in the stock market, a rise in new investors, 250,000 new company registrations, a 38% jump in private sector lending, and debt servicing payments of one trillion rupees over the past year.
He added that electricity tariffs had been reduced, energy costs were expected to decline further, and tax reforms were underway.
On the fiscal front, the government has begun right-sizing 45 ministries and departments, accelerating privatisation of state-owned enterprises, progressing on agreements with China, and planning to issue Panda Bonds by year-end.
Extending Independence Day greetings, the minister paid tribute to the sacrifices behind Pakistan’s creation and urged collective effort towards a prosperous future.
