Monetary policy: SBP leaves interest rate unchanged at 7pc

KARACHI: The State Bank of Pakistan (SBP) on Tuesday announced to keep the interest rate unchanged at 7 percent for the next two months, ARY News reported.

Dr. Reza Baqir, while addressing a press conference after the conclusion of a session of the Monetary Policy Committee (MPC) today, said the interest rate will be retained to 7per cent.

“The incumbent government is taking measures to control inflation and bring down prices of essential commodities,” said Baqir. adding that the main reason to maintain the interest rate is to focus on growth.

He further said that the inflation rate was recorded at 8.9 percent in the month of June, adding that country’s exports continue to show an upward trend and witnessed an increase of 13.7 percent.

Meanwhile, MPC noted that since the last meeting in May, the MPC was encouraged by the continued domestic recovery and improved inflation outlook following the recent decline in food prices and core inflation.

“As a result of these positive developments, growth is projected to rise from 3.9 percent in FY21 to 4 – 5 percent this year, and average inflation to moderate to 7 – 9 percent this year from its recent higher out-turns,” the MPC noted.

According to the central bank, inflation fell from 11.1 percent (y/y) in April to 9.7 percent in June, while for the first time since January, food prices fell on a month-on-month basis in June, on the back of the government’s administrative measures and imports of wheat and sugar.

Read the complete MPC statement here: