KARACHI: The State Bank of Pakistan (SBP) has reduced the Cash Reserve Requirement (CRR) for commercial banks by 100 basis points, lowering it to 5 percent on a weekly average basis and 3 percent on a daily basis, Governor Jameel Ahmad said during a press briefing on Monday.
The move is aimed at injecting additional liquidity into the banking system and supporting private sector credit as economic activity shows signs of improvement.
The CRR represents the portion of banks’ demand and time liabilities that must be maintained with the central bank in cash form. These balances do not earn interest.
The requirement had previously been increased in 2021 as part of efforts to absorb excess liquidity amid rising inflationary pressures.
SBP officials said the adjustment reflects improving inflation dynamics and broader financial stability indicators. The central bank added that the measure would help ease funding conditions for banks and support lending to businesses and consumers.
The decision comes as policymakers seek to balance price stability with growth, while maintaining a cautious monetary stance in a volatile global environment.
