ISLAMABAD: State Bank of Pakistan (SBP) has announced it’s monetary policy for the next two months on Wednesday and raised the discount rate by 0.5 per cent to 10 per cent, ARY News reported.
Central Bank in the current monetary policy has increased the 50 basis points of interest rate in line with requirements set by the International Monetary Fund and hiked the interest rate to the level of 10 per cent after the gap of one year, as it was at the same height on October 2012.
SBP in a statement said that “The step is taken keeping in view an increase in inflation and to discourage savings in the economy.
“This can potentially increase demand pressure through consumption as well as dampen investment, and thus the productive capacity of the economy,” further stated.
Meanwhile, traders, industrialists and stock investors condemned the step of increasing the interest rate to double digit and declared it as an unexpected move from a business friendly government.