SBP keeps policy rate unchanged at 22pc

F.P. Report

ISLAMABAD: The State Bank of Pakistan (SBP) has decided to maintain the status quo and keep the key policy rate unchanged at 22 per cent, according to a press release issued on Monday.

In a statement issued here, the central bank said, “At its meeting today, the Monetary Policy Committee (MPC) decided to maintain the policy rate at 22 per cent. The decision does take into account the impact of the recent hike in gas prices on inflation in November, which was relatively higher than the MPC’s earlier expectation.”

“The Committee viewed that this may have implications for the inflation outlook, albeit in the presence of some offsetting developments, particularly the recent decrease in international oil prices and improved availability of agriculture produce. Further, the Committee assessed that the real interest rate continues to be positive on a 12-month forward looking basis and inflation is expected to remain on a downward path.”

The MPC noted several key developments since its October meeting. First, the successful completion of the staff level agreement of the first review under the IMF SBA programme would unlock financial inflows and improve the SBP’s FX reserves. Second, the quarterly GDP growth outcome for Q1-FY24 remained in line with the MPC’s expectation of a moderate economic recovery. Third, recent consumer and business confidence surveys show improvement in sentiments. Finally, core inflation is still at an elevated level and is coming down only gradually, said the statement.