Karachi: In a major development, the State Bank of Pakistan set the monetary policy at 12.25% as the Monetary Policy Committee (MPC) decided to raise the policy rate by 250 basis points as the country grapples with uncertainty around the outlook for international commodity prices and global financial conditions, which had been exacerbated by the Russia-Ukraine conflict.
1/3 In an emergency meeting today, MPC decided to raise policy rate by 250bps to 12.25%. This strong and proactive policy response was necessitated by a deterioration in outlook for inflation and increase in risks to external stability since last meeting. https://t.co/VSRwxRQJhY
— SBP (@StateBank_Pak) April 7, 2022
In the statement issued by the State Bank of Pakistan, it was noted that the SBP was also taking further complementary actions to reduce pressures on inflation and the current account, namely, an increase in the interest rate on the export refinance scheme (EFS) and widening the set of import items subject to cash margin requirements.