Pakistan is set for a financial transformation as the State Bank prepares to introduce new currency notes and take steps toward a digital currency era.
SBP Governor Jamil Ahmed announced that the new notes will be introduced gradually, with the first set expected in 2025. While speaking informally to the media on Monday, he revealed that the central bank is conducting a technical evaluation of the proposed designs, which will soon be presented to the federal cabinet for approval. Although he did not specify which denomination will be released first, he assured that the rollout would be carefully planned for a smooth transition.
Digital Currency in the Pipeline
Alongside the physical currency redesign, the SBP is making strides toward launching digital currency in Pakistan. Over the past two years, the central bank has been enhancing its technological and regulatory framework in collaboration with international agencies. However, the move requires amendments to the State Bank Act, with a draft amendment bill already under government review. Once the legal and technical groundwork is in place, the SBP will unveil a comprehensive rollout plan.
Policy Rate Cut Amid Economic Stability
In a separate development, the SBP on Monday slashed the policy rate by one percentage point, reducing it to 12%. The decision follows the Monetary Policy Committee’s latest review, which highlighted key economic improvements, including a sustained current account surplus and a sharp decline in inflation.
Governor Jamil Ahmed attributed the rate cut to favorable economic conditions, stating, “The ongoing surplus in the current account and the considerable drop in inflation have created a conducive environment for this rate cut.”