The State Bank of Pakistan (SBP) has kept the key policy rate unchanged at 22% on Thursday after a scheduled meeting of its monetary policy committee, with inflation expected to decline gradually in coming months, the bank’s governor said.
“At its meeting today, the Monetary Policy Committee (MPC) decided to maintain the policy rate at 22 percent,” the SBP said in a statement.
“This decision takes into account the latest inflation outturn reflecting the continuing declining trend in inflation from its peak of 38 percent in May to 27.4 percent in August 2023.
1/4 Monetary Policy Committee (MPC) decided to maintain the policy rate at 22 percent in its meeting today. https://t.co/Rns1WF4AsB#SBPMonetaryPolicy pic.twitter.com/HT9w9wWZAU
— SBP (@StateBank_Pak) September 14, 2023
“Even though global oil prices have risen recently and are being passed on to consumers through adjustment in administered energy prices, inflation is projected to remain on the downward trajectory, especially from the second half of this year.
“As such, real interest rates continue to remain in positive territory on a forward-looking basis. Moreover, the expected ease in supply constraints owing to better agriculture output and the recent administrative measures against speculative activity in the FX and commodity markets would also support the inflation outlook.”
The monetary policy is critical for the stakeholders of the economy, particularly in the wake of over 26pc inflation. The current interest rate has already discouraged traders and businessmen from borrowing costly bank money.
The statement said the MPC will continue to monitor the risks to the inflation outlook and, if required, it will take appropriate action to achieve the objective of price stability.
“At the same time, the MPC also stressed on maintaining a prudent fiscal stance to keep aggregate demand in check. This is necessary to bring inflation down on a sustainable basis and to achieve the medium-term target of 5-7 percent by end-FY25.”
