The State Bank of Pakistan on Friday kept the monetary policy rate unchanged at 7 percent.
In a statement, SBP said that the monetary policy committee (MPC), which met on Friday, decided to maintain the policy rate at 7 percent.
“The MPC noted that since the last meeting in January, growth and employment have continued to recover and business sentiment has further improved. While still modest, at around 3 percent, growth in FY21 is now projected to be higher than previously anticipated due to improved prospects for manufacturing and reflecting in part the monetary and fiscal stimulus provided during Covid.
“The MPC noted that despite the recent slight uptick in market yields, financial conditions remain appropriately accommodative given continued slack in the economy, on-going fiscal consolidation and well contained risks to financial stability. Following a seasonal contraction due to retirement of working capital loans in January, private sector credit has resumed its expansionary trend across all major lending categories. Through FY21 so far, private sector credit has surpassed last year’s corresponding levels on the back of a sizable expansion in fixed investment loans and consumer financing, primarily due to the lower interest rate environment as well as the SBP’s subsidized refinancing schemes, especially LTFF and TERF,” SBP stated.
