SBP jacks up interest rate to 15pc

KARACHI: The State Bank of Pakistan (SBP) on Thursday raised the monetary policy rate by 125 basis points to 15% for the next six weeks to maintain the balance between inflation and economic growth, ARY News reported.

The announcement was made by the Acting State Bank of Pakistan (SBP) governor Murtaza Syed after a meeting of the monetary policy committee.

Murtaza Syed said inflation is increasing across the world and the recent wave is being witnessed for the first time in 50 years. Defending the increase in interest rate, the SBP governor said the situation could have turned worse if the interest rate was not jacked up.

He hoped that the rate of inflation will remain between 18 to 20pc in the current fiscal year of 2022-23.

In the previous monetary policy meeting held on May 23, the SBP raised the monetary policy rate by 150 basis points to 13.75% for the next six weeks to maintain the balance between inflation and economic growth.

“The MPC decided to raise policy rate by 150bps to 13.75%. This action, together with much needed fiscal consolidation, should help moderate demand to more sustainable pace while keeping inflation expectations anchored & containing risks to external stability,” the central bank had said in a statement.