ISLAMABAD – The State Bank of Pakistan has increased the interest rate further to 21 percent in today’s policy review meeting to arrest inflation levels in the crisis hit country.
The meeting of the Monetary Policy Committee (MPC) of the central bank was held for discussion on economic plights to decide about the key policy rate.
1/4 Monetary Policy Committee decided to increase policy rate by 100bps to 21% in its meeting today.https://t.co/JeUhdtDFrq pic.twitter.com/6avIFg4S6c
— SBP (@StateBank_Pak) April 4, 2023
Officials are expected to raise the policy rate by 100-200 basis points (BPS) for the next six weeks as the country is facing back breaking inflation amid economic meltdown.
Last month, SBP raised its key rate by staggering 300 basis points to a record-high level of 20percent, in another desperate move to salvage International Monetary Fund (IMF) bailout funds.
The Pakistan Bureau of Statistics, in its report, said: “CPI inflation General, increased to 35.4% on year-on-year basis in Mar 2023 as compared to an increase of 31.5% in the previous month and 12.7% in Mar 2022”.
On a month-on-month basis, it increased to 3.7% in March 2023 as compared to an increase of 4.3% in the previous month and an increase of 0.8% in March 2022, it said, adding that prices of food, beverages, and transport surged by up to 50 percent.
It is the highest even inflation on a year-on-year basis recorded by the bureau since it started maintaining the record of monthly inflation in the 1970s.
Pakistan s inflation rate rises to 31.5pc, highest in 50 years
Annual food inflation in March was recorded as 47.1 percent and 50.2 percent for urban and rural areas respectively, according to the PBS. Core inflation, which is based on food and energy prices, stood at 18.6 percent in urban areas and 23.1 percent in rural areas.
