The State Bank of Pakistan (SBP) has made a crucial decision to maintain the interest rate at 22 percent. SBP Governor Jameel Ahmad addressed the press after the Monetary Policy Committee (MPC) meeting in Karachi on Monday, confirming that the mark-up rate would remain unchanged for the next two months.
The MPC reviewed various economic indicators, the overall financial position, and the performance of different sectors before arriving at this decision. Despite the challenges posed by the current economic climate, the SBP is hopeful of a 2-3 percent growth during the ongoing fiscal year.
However, the inflation rate is expected to remain in the range of 20-22 percent throughout the financial year. Additionally, the current account deficit is anticipated to stay within the range of 0.5-1.5 percent during the same period.
The MPC has outlined a half-yearly schedule of meetings on a rolling basis. The first meeting of fiscal year 2023-24 took place on Monday, chaired by SBP Governor Jameel Ahmad. The subsequent MPC meetings for the first half of the current fiscal year are scheduled for September 14 (Thursday), October 30 (Monday), and December 12 (Tuesday).
The Monetary Policy Committee plays a pivotal role in formulating the country’s monetary policy. It takes decisions related to intermediate monetary objectives, key interest rates, and reserve supply, and also implements regulations. Moreover, the committee approves and issues the monetary policy statement and other related measures.
The decision to maintain the interest rate at 22 percent reflects the SBP’s commitment to stabilizing the economy and fostering growth amid the prevailing economic challenges.