KARACHI, May 23(ABC): The State Bank of Pakistan (SBP) on Monday raised the benchmark policy rate by 150 basis points (bps) to 13.75% for the next six weeks to maintain the balance between inflation and economic growth.
The central bank believes that this “effective action” was important to anchor inflation expectations and maintain external stability.
“This action, together with much needed fiscal consolidation, should help moderate demand to a more sustainable pace while keeping inflation expectations anchored and containing risks to external stability,” the central bank said in its monetary policy statement (MPS).
The Monetary Policy Committee (MPC) met today for the first time under the leadership of acting governor Dr Murtaza Syed to take decisions regarding the key benchmark interest rate.
It is worth mentioning that the SBP has cumulatively increased the rate by 675 basis points since September 2021 to control inflation and narrow the current account deficit.