State Bank maintains policy rate at 22%

BusinessState Bank maintains policy rate at 22%

KARACHI, Pakistan: The State Bank of Pakistan’s Monetary Policy Committee (MPC) has decided to maintain the policy rate at 22 percent.

In its meeting held on Monday, the Committee observed that the frequent and sizeable adjustments in administered energy prices have slowed down the pace of decline in inflation anticipated earlier besides impeding a sustained decrease in inflation expectations.


On the other hand, the non-energy inflation continues to moderate, in line with the Committee’s expectations.

On balance, the Committee viewed that the real interest rate remained significantly positive on 12-month forward looking basis as inflation is expected to remain on a downward path.

The MPC noted several key developments since its December meeting which have implications for the economic outlook.

First, the Foreign Exchange (FX) reserves have improved on the back of a notable surplus in the current account in December and significant financial inflows including the latest International Monetary Fund (IMF) Standby Arrangement tranche.

Second, fiscal consolidation remained on track and complemented the monetary policy stance.

Third, the business sentiments, as reflected in the recent surveys, continued to improve.

However, the escalated geopolitical tensions in the Red Sea region have led to a surge in global freight charges and are posing risks for global trade and commodity prices.

Taking stock of these developments as well as still-elevated levels of both headline and core inflation, the Committee emphasized on continuing with the tight monetary policy stance.

This, along with continued fiscal consolidation and timely realization of planned external inflows, will help to achieve the inflation target of 5-7 percent by September 2025.

The revised assessment takes into account the recent and expected adjustment in administered energy prices.

Mati-Ullah is the Online Editor For DND. He is the real man to handle the team around the Country and get news from them and provide to you instantly.

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