Tuesday, January 31, 2023

SBP announces to raise interest rate by 150 bps to 8.75pc


KARACHI: State Bank of Pakistan (SBP) Friday announced to raise the interest rate by 150 basis points to 8.75 percent for the next two months while keeping in view the risks related to inflation and the balance of payments, ARY NEWS reported.

Sharing the details of the monetary policy committee (MPC) from its Twitter handle, the SBP said that the rise in interest rate reflects their view that since the last meeting, risks related to inflation and the balance of payments have increased while the outlook for growth has continued to improve.

It further said that with risks rotating from growth to inflation and the current account faster than expected, there is now a need to proceed faster to normalize monetary policy to counter inflation and preserve stability with growth.

“Today’s rate increase is a material move in this direction,” the central bank said. The next meeting of the monetary policy committee would be held on December 14 this year.

Prior to the announcement of the interest rate, the Pakistani rupee extended losses against the United States (US) dollar in the interbank currency market on Friday.

In early trade, the local currency registered gains appreciating by 67 paisas to Rs174 against the greenback. However, the rupee couldn’t maintain the positive momentum and soon afterward, depreciated by 83 paisas to Rs175.50.


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