SBP keeps interest rate unchanged at 9.75%

KARACHI: The State Bank of Pakistan (SBP) decided to keep the benchmark policy rate unchanged at 9.75 per cent in its Monetary Policy Committee (MPC) meeting on Monday.

Addressing a press conference after the MPC meeting, SBP Governor Dr Reza Baqir said the interest rate would remain unchanged for the next two months. He said that the policy rate has been jacked up by 2.75 per cent in the last six months.

He pointed out the core inflation was recorded at 9.8 per cent in the first six months (July-December) of the current fiscal year. Inflation was 12.3 per cent in Dec 2021, he added.

The governor said the country’s current account deficit (CAD) stood at $9.092 billion in the first six month of FY 2021-22. The deficit ballooned to $1.93 billion in Dec 2021, he added.

The interest rate currently stands at 9.75 per cent after two major hikes in the current fiscal year. The key rate has been jacked up by 275 basis points or 2.75% in the first six months of fiscal year 2021-22.

At the previous meeting, the monetary policy committee decided to raise the policy rate by 100 basis points to 9.75%, to “counter inflationary pressures, address the current account deficit, and ensure that growth remains sustainable.”