Interest Rate in Pakistan Decreases
As of February 2025, the State Bank of Pakistan has reduced interest rate. The Interest rate in Pakistan today is 12%. It is the lowest percentage of interest rate in last 3 years. The interest rate in Pakistan in December 2024 was 14%. The State Bank of Pakistan (SBP) has reduced its benchmark interest rate by 100 basis points, bringing it to 12%.
This is the sixth time in a row that rates have been cut, adding up to a total reduction of 1,000 basis points over the last six months. In 2023, State Bank of Pakistan has recorded the all time high interest rate of 22%. The decision to lower the interest rate aligns with a significant decline in inflation rate, which reached 2.4% in January 2025, the lowest in 40 months.
Impacts of Decreasing Interest Rates
- Lower interest rates encourage businesses to take more loans for expansion, leading to higher industrial production and job creation.
- Lower borrowing costs make it easier for consumers to take loans for houses, cars, and businesses.
- The government pays less interest on loans, reducing fiscal pressure.
- Lower interest rates depreciate the currency, making Pakistani exports cheaper and more competitive internationally.
