KARACHI – The State Bank of Pakistan has increased the interest rate by 125 basis points to an all-time high of 15 percent.
Governor State Bank Dr. Murtaza Syed announced the new rates during a presser on Monetary Policy Committee’s (MPC) decision over the key interest rate, amid expectation of further tightening due to soaring inflation.
The action aimed at ensuring a soft landing of the economy amid very high growth in last 2 years, multi-year high inflation, and record imports; as well as an exceptionally challenging & uncertain global environment, SBP said.
1/4 At today’s meeting, the Monetary Policy Committee decided to raise the policy rate by 125 basis points to 15 percent. https://t.co/Dy56T1HGz7
— SBP (@StateBank_Pak) July 7, 2022
It also added that against this challenging backdrop, the MPC noted the importance of strong, timely and credible policy actions to moderate domestic demand, prevent a compounding of inflationary pressures and reduce risks to external stability.
The fifth most populous country is facing an economic crisis, a fall in reserves, and currency depreciation as it is expecting a restart of the much-awaited bailout package from the International Monetary Fund after the new government agreed on tough economic policy adjustments to promote stability.
Earlier this year, the Monetary Policy Committee increased the policy rate by 150 basis points to 13.75%, to manage skyrocketing inflation and mitigate the risks to external stability.
