The State Bank of Pakistan (SBP) on Monday announced an increase of 150 basis points to 13.75 percent in its benchmark policy rate in a bid to contain runaway inflation.
According to the statement issued by the central bank, the action, together with much needed fiscal consolidation, should help moderate demand to a more sustainable pace while keeping inflation expectations anchored and containing risks to external stability.
In Monday’s meeting, the Monetary Policy Committee (MPC) decided to raise the policy rate by 150 basis points to 13.75 percent.
This action, together with much needed fiscal consolidation, should help moderate demand to a more sustainable pace while keeping inflation expectations anchored and containing risks to external stability.
Since the last MPC meeting, provisional estimates suggest that growth in FY22 has been much stronger than expected. Meanwhile, external pressures remain elevated and the inflation outlook has deteriorated due to both home-grown and international factors.
