SBP Keeps Policy Rate Unchanged at 9.75%

 
 
 
Posted by: IIPS Category: Daily Insights Tags: Comments: 0

The State Bank of Pakistan (SBP) announced that the monetary policy rate or key interest rate would remain unchanged at 9.75% to reduce inflation and boost economic growth. According to SBP, demand-moderating policies are gaining traction and have improved the inflation outlook for the coming fiscal year.

The SBP also reported a sustainable growth pattern in the economy. The base effects and rising energy costs keep annual inflation high. However, monthly inflation remained flat after rising by 3% in November. The trend implies that inflation will slow down shortly, providing economic relief to the people. Moreover, the new Finance (Supplementary Act) 2022 provides considerable fiscal consolidation compared to the budget and will help reduce inflation in the coming fiscal year.

According to the MPC, the current real interest rate of 9.75% can yield sustainable results and guide inflation to a medium-term range of 5-7%. This will support growth and preserve external stability.

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IMARAT Institute of Policy Studies

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