The federal government presented the budget for fiscal year 2022–23 last month, and the State Bank of Pakistan (SBP) will announce the new rates on Thursday. The SBP is anticipating the resumption of the International Monetary Fund’s programme.
The central bank tweeted, “The Monetary Policy Committee (MPC) will hold a meeting [today] and the decision will be communicated at 5:00 pm today.”
In an effort to combat retail inflation that is at a 13-year high, Pakistan’s central bank is expected to increase its key policy rate by 100 to 150 basis points during its review today, according to the median estimate of a quick poll of 10 economists and market observers.
The opinions of the renowned professors, economists, and analysts surveyed ranged from 50 to 200 basis points regarding the amount of the increase announced by the State Bank of Pakistan (SBP). Two respondents did not believe that a rate increase was necessary.
In order to combat growing inflation, the central bank increased the benchmark interest rate by 150 basis points (bps) in May, bringing the total increase this year to 400 bps.
Real interest rates have substantially plummeted in the economy with the current policy rate at 13.75 percent and inflation running considerably above.
Yousuf Nazar, an economist who writes for several publications and was formerly with Citigroup, claimed that the State Bank of Pakistan is significantly behind the curve when it comes to anticipating inflation based on the most recent announcement from the monetary policy committee.
He Added “A further increase would increase the cost of servicing the government’s debt and harm many industries. It won’t significantly affect the exchange rate or overall demand, ”
