Geo Business

SBP cuts policy rate by 50 basis points

KARACHI: The State Bank of Pakistan (SBP) on Saturday slashed the discount rate by 50 basis points or 0.5 percent to 13.5 from 14, Geo News reported Saturday. Acting Governor SBP Yasin Anwar while announcing the monetary police for the next two months here said the energy crisis and bad law and order situation adversely affected the growth and feared that the fiscal deficit could climb to 6.2 percent for the previous financial year. He said the government debt is not an issue exclusively relating to 2011 rather it is a basic problem while the tax to GDP ratio presently stood at 8.6 percent which, he regretted, was at a very low level. The acting governor of the central bank said improved exports and remittances helped make foreign payments and the trade deficit remained within a limit of 0.8 percent. He said the foreign exchange reserves held by the SBP had surged to Rs14.8 billion while the rupee value slipped by 0.5 percent during the past fiscal year.