SBP maintains policy rate at 22pc for seventh time
Business
Macroeconomic stabilisation is cited to be the reason contributing to improvement in inflation
KARACHI (Dunya News) – The State Bank of Pakistan (SBP) on Monday maintained the policy rate unchanged at 22pc for the seventh consecutive time.
In its meeting today (Monday), the Monetary Policy Committee (MPC) decided to keep the policy rate unchanged at 22 percent. The committee noted that the macroeconomic stabilisation measures are contributing to considerable improvement in both inflation and external position, amidst moderate economic recovery.
“However, the MPC viewed that the level of inflation is still high. At the same time, global commodity prices appear to have bottomed out with resilient global growth. The recent geopolitical events have also added uncertainty about their outlook.
Moreover, the upcoming budgetary measures may have implications for the near-term inflation outlook,” said the statement issued after the meeting of Monetary Policy Committee.
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The committee stressed on continuation of the current monetary policy stance to bring inflation down to the target range of 5 – 7 percent by September 2025.
Since its last meeting, the MPC noted following key developments. First, data for the first half of FY24 suggests that economic activity is recovering at a moderate pace, led by strong rebound in agriculture sector.
Second, the current account recorded a sizable surplus in March 2024, which helped to stabilize the SBP’s FX reserves despite substantial debt repayments and weak financial inflows.
Third, inflation expectations of consumers inched up in April 2024, whereas those for businesses declined.
And lastly, leading central banks particularly in advanced economies have adopted cautious policy stance after noticing some slowdown in the pace of disinflation in recent months.
