Pakistan cuts key rate first time this year

Karachi

PAKISTAN'S central bank cut its key interest rate for the first time since June 2013 as inflation eased and the government prepares its global Islamic bond sale.

The State Bank of Pakistan lowered the discount rate to 9.5 per cent from 10 per cent, the central bank said in a statement on its website on Saturday. Five of 12 economists in a Bloomberg survey predicted the move while one saw a cut to 9 per cent and the rest forecast no change.

"Limited impact of floods and a favourable trend in global commodity prices" are the main reasons behind the central bank's decision, according to the statement. "Given its recent downward trend, the likelihood for inflation to end t…