The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) has opted to keep the policy rate steady at 22% for the next two months, citing persistent inflationary pressures and elevated inflation expectations.
In its sixth consecutive decision to maintain the policy rate unchanged, the MPC emphasized the need for a cautious approach to address inflation, aiming to bring it down to the target range of 5-7% by September 2025. This decision reflects the committee’s commitment to stabilizing prices amidst economic uncertainties.
The MPC highlighted several key developments influencing the macroeconomic outlook, including a moderate increase in economic activity driven by agriculture output, better-than-expected external current account balance, and a cautious global commodity price environment, albeit with rising oil prices due to geopolitical tensions.
Despite calls from the IMF to maintain the interest rate and demands from the business community to lower it, the SBP remains steadfast in its decision, prioritizing inflation management and macroeconomic stability.
Looking ahead, the SBP will engage with economists to provide insights into the new monetary policy, underscoring the importance of a collaborative approach in navigating economic challenges and achieving sustainable growth.
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