Pakistan lowers rate to 11%, cites better inflation outlook

Global uncertainty surrounding trade tariffs and geopolitical developments pose economic challenges

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Pakistan's central bank reduced its key policy rate by 100 basis points to 11 per cent on Monday, citing an improved inflation outlook and resuming a series of cuts that brought the rate down from a record high of 22 per cent after a brief pause in March.

Nine out of 14 analysts surveyed by Reuters had expected the central bank to hold its key rate, with three expecting a 50-bps cut and only two forecasting a cut of 100 bps.

Despite the favourable inflation outlook, global uncertainty surrounding trade tariffs and geopolitical developments posed economic challenges, warranting a “measured monetary policy stance”, the bank said in a statement.