Pakistan, May 5 -- The State Bank of Pakistan has reduced the interest rate by 1%. This change brings the rate down from 12% to 11%. The announcement was made on Monday, May 5, 2025. The decision came as part of the Bank's regular policy update.

This cut of 100 basis points is expected to support economic activity. It may also ease borrowing costs for businesses and individuals. Lower interest rates usually help boost spending and investment. As a result, the economy can grow at a better pace.

Moreover, the central bank likely responded to signs of slowing inflation. When inflation drops, central banks often cut rates to encourage growth. This move may also help the government manage debt more affordably. However, it could put pressure ...