SBP keeps interest rate unchanged at 15pc

Monetary policy

Business Aug, 23 2022
SBP keeps interest rate unchanged at 15pc
  • 279
  • 0

KARACHI: In line with market expectations, State Bank of Pakistan (SBP) maintained status quo in interest rate at 15 percent highest since November 2008. Monetary policy committee (MPC) met under chair of Deputy Governor Syed Murtaza and reviewed economic indicators. Despite record high inflation central bank decided to keep interest rate unchanged for next six weeks. Central bank cumulatively increased rate by 800 basis points from September 2021 to July 2022 to control inflation and narrow current account deficit. 

Central bank felt that it was “prudent to take a pause at this stage” as it noted that recent inflation developments are in line with expectations, domestic demand is beginning to moderate and external position is also showing some improvement due to a lower trade deficit and resumption of International Monetary Fund programme. Committee noted that in order to contain external pressures and support rupee going forward, “It is important to contain current account deficit by delivering budgeted fiscal consolidation, lowering energy imports through energy conservation measures, and keeping IMF programme on track.” Headline inflation rose further to 24.9 percent in July, with core inflation also ticking up. Trade balance fell sharply in July and rupee has reversed course during August, appreciating by around 10 percent on improved fundamentals and sentiment. In its forward guidance, central bank hinted at tightening policy rate in next meeting scheduled to be held on October 10.  

Central bank projected that in coming months, curbing food inflation through supply-side measures that boost output and resolve supply-chain bottlenecks should be a high priority. “MPC will continue to carefully monitor developments affecting medium-term prospects for inflation, financial stability and growth,” it maintained. Terming decision taken by central bank as “good”, Alpha Beta Core CEO Khurram Schehzad lauded central bank for not raising interest rate anymore.

Published in The Daily National Courier, August, 23 2022

Like Business on Facebook, follow @DailyNCourier on Twitter to stay informed and join in the conversation.

NC Big Stories

PCMD inks MoU with Ziauddin University

KARACHI: The Dr. Panjwani Center for Molecular Medicine and Drug Research (PCMD), part of the International Center for Chemical and Biological Sciences (ICCBS) at the University of Karachi, has entered into a Memorandum of Understanding (MoU) with th...

ACPK’s “Awami Theater Play” stages Balochi Drama “Wash Rang”

KARACHI: Arts Council of Pakistan Karachi’s 21-day “Awami Theatre Festival” is underway with great enthusiasm. On the festival’s fifth day, the Balochi drama “Wash Rang” (“Beautiful”) was performed at...

PVMA celebrates Atif Ikram Sheikh’s appointment as CACCI Vice President

KARACHI: The Pakistan Vanaspati Manufacturers Association (PVMA) has extended its heartfelt congratulations to Atif Ikram Sheikh, President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), on his recent election as Vice Presid...

Meta supports Pakistani creators in Karachi to inspire new wave of content

KARACHI: Meta connected with content creators in Karachi through various engagements starting with an event on November 6 that brought together around 40 creators from across Pakistan. Throughout the week, Meta worked with popular creators like Food...

More like this
Related

Meta supports Pakistani creators in Karachi to inspire new wave of content

KARACHI: Meta connected with content creators in Karachi through various engagements starting with an event on November 6 that brought together around 40 creators from across Pakistan. Throughout the week, Meta worked with popular creators like Food...

Gold price rises by Rs1,400/tola

KARACHI: After a sharp decline in the previous session, gold prices in Pakistan saw a notable rebound on Wednesday, tracking the upward movement in international rates. The price of gold per tola rose by Rs1,400, settling at Rs271,900 in the local m...

Pakistani rupee appreciates marginally against USD

ISLAMABAD: The Pakistani rupee showed a slight improvement against the US dollar on Wednesday, gaining 0.03% in the inter-bank market. At the close of trading, the rupee settled at Rs277.85, marking an increase of Re0.08 compared to the previous day...

KSE-100 ends marginally higher amid volatile trading

KARACHI: The Pakistan Stock Exchange (PSX) saw volatile trading on Wednesday, with the KSE-100 Index closing with a modest gain of 131 points. After starting the session in the red, the index hit an intra-day low of 92,943.08 points. However, a wave...
Need Help? Chat with us