State bank keeps key policy rate unchanged at 22%

The State Bank of Pakistan (SBP) published its Monetary Policy 2023 on Monday and decided to keep the interest rate constant at 22 percent.

According to the data, the SBP governor stated that the MPC resolved to maintain the interest rate at 22 percent for the next one and a half months. The move comes against the backdrop of the country’s high inflation rate, which is currently at 29.2 percent.

Before deciding to keep the interest rate unchanged, the State Bank’s Monetary Policy Committee carefully examined economic indicators and the current inflation scenario. The government’s actions have resulted in a significant improvement in the current account.

The current fiscal year’s inflation rate is predicted to be around 20-22 percent, showing considerable alleviation from the previous pace.

The State Bank’s efforts to stabilise foreign exchange reserves have been laudable, with reserves now totaling $8.2 billion. Governor Jameel Ahmed expressed optimism that foreign exchange reserves would improve significantly by December.

In terms of GDP growth, the Governor emphasized the bank’s priority of achieving stability. GDP growth for this fiscal year is expected to be in the region of 2 to 3 percent.

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