KARACHI: The State Bank of Pakistan (SBP) decided on Monday to maintain its benchmark interest rate at 15% for the ensuing seven weeks, as predicted by experts.The central bank stated in a thread shared on Twitter that “the committee was of the view that based on currently available information, the existing monetary policy stance strikes an adequate balance between managing inflation and preserving growth in the wake of the floods.”
The Monetary Policy Committee (MPC) met for the first time today following the appointment of SBP Governor Jameel Ahmad and Finance Minister Ishaq Dar.
Dar’s old recipe for managing a controlled economy, in which he would want to have a lax monetary policy, guided his decision to retain the status quo.
Between September 2021 and July 2022, a total of 800 basis points were added to the rate, bringing it to 15%.
The two main weapons available to central banks throughout the world to control inflation readings and steer the economic trajectory in their individual countries are the interest rate and a flexible rupee-dollar parity.
