The State Bank of Pakistan (SBP) has announced that it will keep the key policy rate unchanged at 22 per cent. This decision was made after a meeting of the bank’s Monetary Policy Committee (MPC). The SBP believes that despite the recent rise in global oil prices, inflation is expected to decrease, particularly in the second half of the year.
The MPC has also evaluated that the tight monetary policy stance, improved agriculture outlook, and recent administrative and regulatory reforms will contribute to achieving the medium-term inflation target. It emphasizes the importance of maintaining a prudent fiscal stance to control aggregate demand and ensure long-term price stability.
Furthermore, the committee will continue to monitor potential risks to the inflation outlook and take appropriate action if necessary. It aims to bring inflation down to the target range of 5-7% by the end of the financial year 2025.
By maintaining a steady policy rate, the SBP seeks to create a conducive environment for economic growth and stability. It recognizes the need for continuity and consistency in monetary policies to support businesses and promote sustainable development.
Overall, the decision to keep the interest rate unchanged reflects the SBP’s commitment to managing inflation while supporting the country’s economic recovery.