Interest rate hike: SBP prepones monetary policy meeting to Mar 2

KARACHI: The State Bank of Pakistan (SBP) on Tuesday preponed its Monetary Policy Committee on March 2 — two weeks earlier than scheduled, ARY News reported.

“The forthcoming meeting of the Monetary Policy Committee has been preponed and now it will be held on Thursday, March 02, 2023,” the SBP said in a brief statement.

The next meeting of the central bank’s Monetary Policy Committee was initially scheduled for March 16.

The forthcoming meeting of the Monetary Policy Committee has been preponed and now it will be held on Thursday, March 02, 2023. pic.twitter.com/555JOhCFoe

— SBP (@StateBank_Pak) February 28, 2023

The bank revised the schedule for the meeting to fulfil another condition of the IMF to hike key policy rates by 200-300 basis points to win back the $6.5 billion loan programme.

According to sources, a virtual meeting held between the IMF and Pakistani officials was held last week.

“Pakistan has consented over further tightening the monetary policy,” sources said.

“The policy rate will likely to be enhanced by two percent in tandem with the inflation rate,” according to an analyst.

“Moreover, details are being decided over the power sector issues, and the staff level agreement will be reached after these issues will be decided,” officials said.

According to officials, Pakistan has given detailed briefing to the IMF with regard to foreign exchange receipts until June,” officials said.

The Fund’s officials also holding talks with the countries from which foreign exchange will come.

“Pakistan has to ensure keeping foreign exchange reserves equal to two months imports till June,” sources said

“The monetary policy board of the State Bank of Pakistan will take final decision about the interest rate,” sources added.