The State Bank of Pakistan (SBP) on Monday chose to maintain the status quo by upholding the key policy rate at 22 per cent for the seventh policy meeting in a row.
The announcement came after a meeting of the bank’s Monetary Policy Committee (MPC).
In a statement, the MPC said that the continuation of the current monetary policy stance, with significant positive real interest rates, was necessary “to bring inflation down to the target range of 5-7pc by September 2025”.
Giving its reasoning, the MPC noted that global commodity prices appeared to have bottomed out with “resilient global growth”, recent geopolitical events had also added uncertainty about their outlook and the upcoming budgetary measures may have implications for the near-term inflation outlook.
It said it “viewed that the level of inflation is still high”.
On a positive note, the MPC highlighted that “macroeconomic stabilisation measures are contributing to considerable improvement in both inflation and external position, amidst moderate economic recovery”.
Last month, the committee had chosen to maintain the status quo by upholding the key policy rate at 22 per cent for the sixth policy meeting in a row.
Today’s decision also comes ahead of the country nearing its completion of a $3 billion standby arrangement (SBA) it secured from the International Monetary Fund (IMF) last year. The IMF Executive Board is expected to meet later today to decide on the final tranche of $1.1bn.
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