The State Bank of Pakistan (SBP) has hiked interest rates by 150 basis points, or 1.5 per cent, after which the base rate 0 down to 13.75 po...
The State Bank of Pakistan (SBP) has hiked interest rates by 150 basis points, or 1.5 per cent, after which the base rate 0 down to 13.75 points.
According toa press release issued by the SBP, in today's meeting, the Monetary Policy Committee decided to increase the policy rate, which will help in the necessary financial stability.
Yan said the provisional estimates from the last meeting of the Monetary Policy Committee suggest that the growth rate in FY22 was higher than expected.
On the other hand, the external pressure is very high while the inflation situation is also bad due to some internal and external factors.
The central bank's monetary policy committee has also raised interest rates on EFS and LTFF loans, in addition to raising the policy rate, while linking the rate to the policy rate, saying it would automatically adjust. Will be
The SBP says economic growth is expected to be between 3.5 per cent and 4.5 per cent in FY23-2022.
Read also: Announcement of new monetary policy, decision to keep interest rate at 9.75%
Internally, the country's expansionary fiscal stance this year has boosted demand due to the recent energy subsidy package, while the uncertainty created by the lack of a long-term policy has also put pressure on the exchange rate.
On the other hand, due to the Russia-Ukraine conflict and the new wave of Corona in China, supply has been affected.
'Inflation likely to rise temporarily'
The SBP said in a statement that the economy recovered faster than expected after the epidemic Code 19, while inflation remained at a two-year high in April, in double digits for the past six months.
The statement said that the rupee has depreciated due to some domestic factors and appreciation of the dollar in the international market.
According to the SBP's Monetary Policy Committee, inflation is likely to rise temporarily in FY 2023, with fuel and electricity subsidies being withdrawn, in line with the continued program with the International Monetary Fund (IMF). Inflation is likely to remain high during the next financial year.
After that, due to various local and global factors, inflation is expected to fall to 5-7% by the end of FY2024, the central bank said.
The SBP also noted that inflation rose to 13.4 per cent in April from 12.7 per cent in March on an annual basis due to deteriorating food prices and basic inflation.
Inflation is expected to rise temporarily and remain high during FY23, while declining sharply during FY24, the statement said. And subject to changes in local monetary policy.
It may be recalled that the central bank had last month announced an increase of 250 basis points in the policy rate.
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