SBP reserves jump 12.9pc to stand at $8bn

KARACHI: Total liquid foreign reserves of the country as on July 12 stood at US$ 15.249 billion after an increase of $918 million (12.9pc), said the State Bank of Pakistan (SBP).

According to SBP, the foreign reserves held by  State Bank amounted to $ 8,001.3 million and the net foreign reserves with by Commercial Banks were $ 7,247.9 million on July 12.

During the week ending July 12, SBP received the first tranche of $991.4 million from International Monetary Fund.

After taking into account the outflows relating to external debt and other official payments, SBP reserves increased by $918 million during the week.

Earlier on Tuesday, Governor State Bank of Pakistan (SBP) announced one percent hike in the interest rate.

Governor Dr Reza Baqir in a press conference here today unveiling the monetary policy for the next two months announced 100 basis points hike in the interest rate, which now reached to 13.25 percent.

The decision made due to increasing inflationary trend and devaluation of the rupee, he said.

The governor said that the inflation forecast has been revised up to 11-12 percent for the current fiscal year, however, it is expected to improve in the next fiscal year 2020-21.

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He said that the central bank would consider downward revision of the the interest rate if inflation eases and demand further softens.

The central bank chief said that “The interest rate hike will help control dollarisation of the economy. People will prefer to keep savings in rupee rather than in the foreign currency.”

He said the interest rate hike will benefit those who have made savings in saving accounts at banks or in national saving schemes.

The SBP has increased the key interest rate by 7.5% since May 2018 to 13.25%.

The Monetary Policy Committee of SBP met today at SBP Head Office in Karachi to decide about the Monetary Policy for the next two months.