KARACHI: The State Bank of Pakistan will announce monetary policy on Monday (today) and decide on the interest rate for the next two months, ARY NEWS reported.
In April this year, the State Bank of Pakistan (SBP) set the benchmark interest rate at 12.25%, the central bank said in a statement.
Acknowledging in its statement that the significant uncertainty surrounding the outlook for international commodity prices and global financial conditions required a strong and proactive policy response, the Monetary Policy Committee (MPC) decided to change interest rates at its emergency meeting today 250 basis points to 12.25 percent.
This increases forward-looking real interest rates (defined as policy rate minus expected interest).
inflation) in slightly positive territory. The MPC believed that this measure would help ensure external and price stability.
The MPC also noted that SBP is in the process of taking further measures to ease inflation and current account pressures, namely raising the interest rate on the Export Refinancing Scheme (EFS) and expanding the range of import positions subject to a cash margin subject to need.
The statement said the inflation outlook has deteriorated since the last MPC meeting and risks to external stability have increased. Externally, futures markets are suggesting that global commodity prices, including oil, are likely to remain elevated for longer and that the Federal Reserve is likely to hike interest rates faster than previously expected, likely resulting in more tightening in global financial conditions.
In addition, there was a decrease in SBP’s foreign exchange reserves, mainly due to debt repayments and government payments related to the settlement of an arbitration award related to a mining project.
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