Interest rate surges to historic high in 26 years

LAHORE (Dunya Investigation Cell) – The State Bank of Pakistan has announced a new policy and increased the interest rate to the country’s highest ever at 20 percent.

As per the statistics of SBP, the highest-ever interest rate was set on June 22, 1996, when it was maintained at 20 percent. It was changed after 362 days on June 18, 1997, at 19 percent.

There has been an increase in the interest rate five times with a growth of 775 basis points in the short period of 11 months.

In the last three decades, the minimum interest rate was 5.75 percent on May 23, 2016, and it was maintained for twenty months till January 29, 2018.

In the government of Pakistan Tehreek-e-Insaf Chief Imran Khan, the policy rate was announced 15 times in which the policy rate was increased 10 times, and decreased five times.

Under the current coalition government, the interest rate was enhanced with an increase of 150 points and set at 13.25 percent on May 24, 2022, and it was increased by 125 points when it was set at 16 percent.

The interest rate surged to 17 percent by the SBP with an increase of 100 basis points and on January 24, 2023, another 100 points increased when the interest rate was set at 18 percent.

It didn’t remain there. The SBP, after only 38 days, increased the policy rate by 300 points and set it at 20 percent.

Pertinent is to mention here that the country’s $1.2 billion deal with the IMF has not been finalized. In this atmosphere of political and economic uncertainty, the SBP has increased the interest rate by 500 basis points.