ISLAMABAD: Pakistan’s central bank has cut its key interest rate by 100 basis points to 12 percent, the bank’s governor announced on Monday, amid easing inflation and expectations for growth to pick up after consecutive rate cuts in the last six months.
The State Bank of Pakistan (SBP) has slashed rates from an all-time high of 22 percent in June last year in one of the most aggressive moves among central banks of emerging markets.
Speaking at a press conference, SBP Governor Jameel Ahmed said inflation would ease further in January, but core inflation remained elevated, forecasting that full-year inflation would remain between 5.5-7.5 percent in the fiscal year ending in June.
“The Monetary Policy Committee, after a lot of discussions, decided to reduce our policy rate from 13 percent to 12 percent. In other words, a reduction of 100 basis points was decided in today’s meeting,” he said.
“Our full-year forecast for this year, from July 2024 to June 2025, is that the full-year inflation, in our opinion, will be between 5.5 percent and 7.5 percent.”
Pakistan’s consumer inflation rate fell to 4.1 percent in December, its lowest in more than six years, helped by favorable base effects. It was below the government’s forecast and down from a multi-decade high of around 40 percent in May 2023.
Pakistan posted a current account surplus of $0.6 billion in Dec., bringing the cumulative surplus to $1.2 billion for the first half of the current fiscal year, according to the central bank governor. This was the result of “major positive developments” in the last six months.
“The current account level that we are foreseeing now, which would be the average of this entire year, that is 0.5 percent deficit to 0.5 percent surplus,” Ahmed said.
The central bank maintained its forecast of full-year gross domestic product (GDP) growth at 2.5-3.5 percent. Under a $7 billion bailout from the International Monetary Fund (IMF), Pakistan’s $350 billion economy grew 0.92 percent in the first quarter of fiscal 2024-25, according to data approved by the National Accounts Committee in Dec.
The IMF will conduct a first review of the program in March, according to Ahmed.
“We have taken all actions required by the IMF from the central bank’s side,” he added.
Topline Securities, a Karachi-based brokerage and securities firm, said the latest rate cut would positively impact high leverage, cyclical and consumer discretionary companies.
“The leverage companies will benefit from lower finance cost, cyclicals will benefit from recovery of economy and consumer discretionary companies like autos will benefit from expected rise in consumer financing,” it said.
“Sector-wise, textile sector should stand beneficiary due to high leverage with positive impact of 3-5 percent, Steels 2-4 percent, and cement sector 2-3 percent.”
Pakistan central bank cuts key policy rate to 12 percent amid easing inflation
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Pakistan central bank cuts key policy rate to 12 percent amid easing inflation
- The State Bank of Pakistan has slashed rates from an all-time high of 22 percent in June 2024
- Pakistan’s consumer inflation rate fell to 4.1 percent in December, its lowest in over six years
Bomb blast in northwestern Pakistan kills one— police
- Initial investigations show bomb was planted near Bajaur district health officer’s house, say police
- Bajaur district neighboring Afghanistan was once a stronghold of Pakistani Taliban militants
PESHAWAR: A bomb blast in Pakistan’s northwestern Bajaur city killed one person, a senior police officer said this week amid Islamabad’s efforts to contain surging militancy.
Police officer Hunar Khan said a “strong explosion” took place in front of the residence of Bajaur District Health Officer Dr. Gauhar Ayub on Thursday, killing his father.
“It was a powerful blast and the device was planted close to the house of the gate of DHO Dr. Gauhar Ayub,” Khan told Arab News. “The father of the DHO died on the spot.”
The official said police arrived at the scene shortly after the blast and cordoned off the area to conduct an investigation. Khan said police and security forces were conducting a search operation in the area.
“Initial investigations show it was a planted bomb,” he added.
No group has claimed responsibility for the blast but suspicion is likely to fall on the Tehreek-e-Taliban Pakistan (TTP) or the Pakistani Taliban outfit. It has carried out some of the deadliest attacks against Pakistani civilians and law enforcers since 2007.
The Bajaur district near Pakistan’s border with Afghanistan was once a stronghold of the Pakistani Taliban before the Pakistani army drove militants out of the tribal districts in successive operations in the late 2000s.
Pakistan accuses the Afghan government of not taking action against Pakistani Taliban militants that it says operate from its soil. Kabul denies the allegations and urges Pakistan to resolve its security issues internally.
Surging militancy in Pakistan’s northwestern and southwestern provinces bordering Afghanistan, since the Afghan Taliban captured Kabul in August 2021, have strained Islamabad’s ties with its neighbor.
Pakistan delegation in Washington says India laying foundations of first ‘nuclear water war’
- Nine-member delegation headed by former foreign minister Bilawal Bhutto-Zardari is visiting world capitals
- Delegation is presenting Pakistan’s position following worst military confrontation with India in decades last month
ISLAMABAD: The head of a delegation visiting Washington DC to present Islamabad’s position following a recent military standoff with New Delhi said on Thursday India shutting down Pakistan’s water supply would be tantamount to laying the “foundations for the first nuclear water war.”
Tensions between nuclear-armed neighbors Pakistan and India are high after they struck a ceasefire on May 10 following the most intense military confrontation in decades. Both countries accuse the other of supporting militancy on each other’s soil — a charge both capitals deny.
The latest escalation, in which the two countries’ militaries traded missile, drones and artillery fire, was sparked after India accused Pakistan of supporting militants who attacked dozens of tourists in Indian-administered Kashmir on April 22, killing 26. Islamabad denies involvement. Following the attack, Delhi unilaterally “put in abeyance” the Indus Waters Treaty of 1960, which governs usage of the Indus river system. The accord has not been revived despite the rivals agreeing on a ceasefire on May 10.
“In the age of climate challenges that are to come, water scarcity and water wars, or anyway, used to be a theory,” Bilawal Bhutto Zardari, a former foreign minister who is heading the Pakistani delegation, said at an event at the Middle East Institute in Washington.
“India’s shutting off Pakistan’s water supply is laying the foundations for the first nuclear water war.”
Islamabad had said after India suspended the Indus Waters Treaty that it considered any attempt to stop or divert the flow of water belonging to Pakistan to be an “act of war.”
About 80% of Pakistani farms depend on the Indus system, as do nearly all hydropower projects serving the country of some 250 million.
“It is an existential crisis for us,” Bhutto Zardari said in DC. “Any country on the planet, no matter their size, their strength, or their ability, would fight for their survival and fight for their water. India must abide by the Indus Waters Treaty.”
He urged Washington and other countries not to allow India to violate the treaty or fulfil its threat of stopping Pakistan’s rightful share of Indus waters.
“You cannot allow this precedent to be set in the Pakistan context, because we’ll fight the first war, but it won’t be the last,” Bhutto Zardari warned.
“If India is allowed to cut off our water, that means that every upper riparian with hostilities to a lower riparian now has a carte blanche.”
Prime Minister Shehbaz Sharif announced the nine-member diplomatic group last month, headed by Pakistan Peoples Party Chairman Bilawal Bhutto Zardari, who has been leading a team to visits in New York, Washington DC, London and Brussels since June 2. Another delegation, led by Special Assistant to the Prime Minister Syed Tariq Fatemi, has visited Moscow.
Earlier on Thursday, Bhutto Zardari’s delegation met members of the US Congressional Pakistan Caucus in Washington, including Republican party leaders Jack Bergman and Ryan Zinke and Democratic leaders Tom Suozzi and Ilhan Omar, among others.
“Pakistan remains committed to peace, but sadly, India consistently resists dialogue,” Bhutto Zardari told the American lawmakers, according to a statement released by Bilawal House, his official residence.
Pakistan and India, bitter rivals, have fought two out of three wars over the disputed territory of Kashmir that they both claim in full but govern only parts of.
Pakistan commits to provide basic, tactical-level training to Belarusian fighter pilots
- Belarus Air Force delegation meets Pakistan Air Force chief in Islamabad, says Pakistan military
- Trainings to include high-level exchange programs to foster professional development, it says
ISLAMABAD: Pakistan Air Force Chief Air Marshal Zaheer Ahmed Babar Sidhu on Thursday said the PAF was ready to support the Belarus Air Force (BAF) with basic to tactical level training, the military’s media wing said, as both sides discussed military and air cooperation.
Sidhu met a high-level defense delegation led by BAF and Air Defense Commander Major General Andrei Yulianovich Lukyanovich, the Pakistani military’s media wing said.
“During the meeting, Chief of the Air Staff [..] assured that PAF is committed to extending full support for the basic to tactical-level training of pilots and maintenance crews for capacity building of BAF,” the Inter-Services Public Relations (ISPR), the military’s media wing, said in a statement.
“This includes the initiation of high-level exchange programs aimed at fostering professional development between the two air forces.”
Lukyanovich expressed a strong interest in learning from the PAF’s extensive operational experience in wartime operations and conveyed the BAF’s eagerness to draw lessons from the PAF’s combat-tested doctrines and training programs, the ISPR said.
The PAF says it shot down six Indian Air Force jets on the night of May 6 while repelling Indian air attacks. India’s defense chief recently admitted the country lost fighter jets to Pakistan. However, he denied six jets were shot down.
The meeting takes place a day after Pakistan Prime Minister Shehbaz Sharif met Belarusian Defense Minister Lt. Gen. Victor Khrenin in Islamabad, where the two discussed bilateral defense and technology ties.
Sharif visited Belarus in April during which both countries signed a roadmap for military-technical cooperation from 2025 to 2027, along with multiple agreements in trade, defense and industrial collaboration.
Pakistan accelerates push to operationalize regulatory framework for digital assets
- Finance Minister Muhammad Aurangzeb chairs key meeting on Pakistan’s digital assets legislation
- Pakistan state minister for crypto meets US lawmakers to strengthen digital assets cooperation
KARACHI: Pakistan’s Finance Minister Muhammad Aurangzeb on Thursday stressed operationalizing a framework to harness blockchain and crypto technologies’ economic potential and to fast-track their approval process, the Finance Division said amid Islamabad’s push to adopt digital assets.
Islamabad established the Pakistan Crypto Council (PCC) in March to help guide national policy on blockchain, digital currencies and crypto-related investments. This was followed by the government’s announcement of a Strategic Bitcoin Reserve (SBR) at the Bitcoin 2025 Conference in Las Vegas, making Pakistan one of the first Asian countries to integrate Bitcoin into its sovereign asset strategy. The government also plans to establish an autonomous regulatory body to oversee the country’s digital finance and crypto ecosystem.
Aurangzeb chaired a meeting at the Finance Division to review progress on the development of a comprehensive regulatory framework for digital and virtual assets in the country. The law ministry tabled a draft of the proposed legal framework during the meeting, which was developed through close collaboration with members of the PCC, key stakeholders and technical experts.
“During the meeting, the draft was thoroughly reviewed and refined,” the Finance Division said. “It was collectively agreed that in-principle approval process will be fast-tracked to ensure timely enactment and effective implementation.”
The draft legislation outlines a regulatory structure for digital and virtual assets, encompassing governance mechanisms, licensing protocols and investor protection provisions, the statement said. The proposed framework seeks to position Pakistan as a forward-looking participant in the digital asset ecosystem, it added.
‘BEST IDEAS’
Separately, Pakistan’s State Minister for Crypto and Blockchain Bilal Bin Saqib met over a dozen key American officials and lawmakers in Washington to strengthen cooperation in digital assets, blockchain regulation, and financial innovation, his office said.
Saqib met Senator Cynthia Lummis, co-author of the Lummis-Gillibrand Responsible Financial Innovation Act and co-sponsor of the BITCOIN Act, which seeks to designate Bitcoin as a strategic reserve asset.
Saqib’s office said Lummis has been a leading advocate for “thoughtful and comprehensive” crypto legislation in the US.
He also met Senator Ted Cruz, Congressman Troy Downing, who is a member of the House Financial Services Subcommittee on Digital Assets, Congressman Ryan Zinke, Congressman Rick McCormick, and Congressman Derrick Van Orden.
Saqib’s office said these lawmakers were engaged in shaping policy frameworks related to emerging technologies in the US.
“We came to learn, to listen, and to contribute,” Bilal said. “Pakistan is actively studying how global leaders are approaching regulation, innovation, and financial inclusion — not to copy, but to adapt the best ideas for our own unique landscape.”
Pakistan’s broader digital asset strategy includes allocating 2,000 megawatts of surplus power to support Bitcoin mining and AI-driven data zones, aiming to turn untapped energy into economic productivity, job creation and digital infrastructure growth.
As regulatory frameworks continue to evolve globally, Pakistan says it is taking proactive steps to integrate private sector innovation with state policy and international partnerships, positioning itself as a key player in the next phase of the global digital economy.
In meeting with US lawmakers, Pakistani delegation says Delhi resisting dialogue with Islamabad
- Pakistan’s PM set up delegation last month, tasking it to present Islamabad’s perspective on recent India conflict
- Pakistani delegation criticizes India’s suspension of water-sharing agreement, says endangers future of entire region
KARACHI: A Pakistani delegation led by former foreign minister Bilawal Bhutto Zardari met a group of American lawmakers on Thursday, telling them that India is consistently resisting dialogue to resolve bilateral issues.
Prime Minister Shehbaz Sharif set up the delegation last month, tasking it to present Pakistan’s point of view regarding the country’s conflict with India last month. India and Pakistan last month engaged in four days of fighting, striking each other with missiles, drones, artillery and fighter jets before Washington brokered a ceasefire on May 10.
Bhutto Zardari’s delegation has held a series of meetings with top international diplomats since arriving in New York on Monday, urging the global community to help India and Pakistan enter a comprehensive dialogue to peacefully resolve their differences.
On Thursday the delegation met members of the US Congressional Pakistan Caucus in Washington. These included Republican party leaders Jack Bergman and Ryan Zinke and Democratic leaders Tom Suozzi and Ilhan Omar, among others.
“Pakistan remains committed to peace, but sadly, India consistently resists dialogue,” Bhutto Zardari was quoted as saying by Bilawal House, his official residence.
The former foreign minister criticized India’s decision to hold in abeyance the Indus Waters Treaty, a decades-old water-sharing agreement with Pakistan.
“India has weaponized water, endangering the future of not only Pakistan but the entire region,” he said.
He warned that if Indian hostility is not curbed in time, it could “seriously jeopardize regional peace.” The Pakistani politician reaffirmed his country’s desire for constructive engagement based on mutual respect and peaceful resolution of disputes, the statement said.
“The members of Congress welcomed the delegation, listened carefully to Pakistan’s concerns, and expressed willingness to strengthen bilateral engagement and regional stability,” the statement concluded.
Tensions between the arch-rivals began on April 22 when militants attacked a resort in Indian-administered Kashmir’s Pahalgam area, killing 26 tourists.
India blamed Pakistan for supporting militants involved in the attack, a charge Pakistan vehemently denied and called for a transparent, international probe into the incident.
Pakistan and India, bitter rivals, have fought two out of three wars over the disputed territory of Kashmir that they both claim in full but govern only parts of.
India accuses Pakistan of supporting militants in the part of Kashmir it administers. Islamabad denies the allegation and says it extends only diplomatic and moral support to the people of Kashmir.
