Pakistan, Dec. 8 -- The State Bank of Pakistan (SBP) recently reduced its policy interest rate from 22 percent to 15 percent. This move signals a strategic shift from combating inflation to fostering growth and reflects the central bank's confidence in stabilizing macroeconomic indicators. With inflation significantly declining from a peak of nearly 40 percent in May 2023 to 7.2 percent in October 2024, the SBP is leveraging this opportunity to stimulate economic activity. However, the implications of this decision extend beyond immediate relief, raising critical questions about its broader impact on Pakistan's economy.

The reduction in interest rates is expected to lower borrowing costs for businesses and individuals, providing much-nee...