KARACHI, Pakistan: The State Bank of Pakistan (SBP) has decided to keep the policy rate unchanged at 15 percent.
In its meeting held in Karachi on Monday, the Monetary Policy Committee (MPC) decided to maintain the policy rate at 15 percent, said a statement issued following the meeting.
The statement said that with recent inflation developments in line with expectations, domestic demand beginning to moderate and the external position showing some improvement due to a lower trade deficit and resumption of the International Monetary Fund (IMF) program, the MPC felt that it was prudent to take a pause at this stage.
This pause allows the MPC to assess impact of 800 basis points tightening since last September and fiscal consolidation planned for the Fiscal Year 2023. It is also in line with recent actions by other emerging market central banks, who have been holding rates in recent meetings as global growth and commodity prices have slowed.
To contain external pressures and support the rupee going forward, it is important to contain the current account deficit by delivering the budgeted fiscal consolidation, lowering energy imports through energy conservation measures, and keeping the IMF program on-track.
Looking ahead, the MPC intends to remain data-dependent, paying close attention to month-on-month inflation, inflation expectations, developments on the fiscal and external fronts, as well as global commodity prices and interest rate decisions by major central banks, the statement added.
