Interest rate jacked up to 12.25 per cent in SBP's latest monetary policy

State Bank of Pakistan on Monday announced its latest monetary policy for the next two months amidst weakening rupee and a nosediving stock market, ARY News reported.

The central bank increased the discount rate by 150 basis points. The new rate will be 12.25 per cent for two months.

The bank informed that since the last monetary policy was issued, three major changes had occurred including a $6 billion package from the International Monetary Fund (IMF), 5.93 per cent depreciation of the rupee, and an increase in government’s borrowing in last nine months.

The State Bank also forecasted that growth rate would remain sluggish in the fiscal year 2019, whereas it may see a slight improvement in the year 2020.

The current account deficit was, however, recorded to be 29 per cent lesser in nine months of the current fiscal year compared to the first nine months of last fiscal year.

According to the central bank, the inflation rate is currently at 7 per cent, whereas it was 3.8 per cent in this duration last year.

However, the bank said that a hike in prices of petroleum and other products was responsible for rising inflation.