KARACHI – State Bank of Pakistan is expected to raise the interest rate at the upcoming meeting after it was demanded by International Monetary Fund (IMF).
Sharif-led government is making desperate measures to get much-needed funds and as Islamabad is close to secure bailout from global lender, IMF demanded a strict monetary policy that may trigger a hike in interest rate.
It was reported that market participants in a recent Treasury bill auction are expecting at least a 200 basis points increase in the central bank’s policy rate. It was learnt that officials raised Rs258 billion in the auction.
Reports also claimed that the cut-off rates for the 3-month, 6-month, and 12-month tenors soared 195 bps, 206 bps, and 184 bps, elevated than the previous auction.
Pakistan is taking desperate measures to secure IMF funding, as the government slapped hefty, artificial restrictions on the exchange rate.
State Bank of Pakistan’s Monetary Policy Committee is set to be held next month but experts hinted at the surge in rate hike in coming days.