The State Bank of Pakistan (SBP) announced it would maintain the steady benchmark interest rate at 22 per cent.
The SBP’s decision was made following the bank’s Monetary Policy Committee (MPC) meeting. Before reaching this conclusion, the MPC carefully considered various economic factors, including recent inflation trends and global economic developments.
The SBP statement highlighted that inflation in November 2023 was higher than anticipated, primarily due to increased gas prices. However, compensating factors could moderate this impact, such as the recent decrease in international oil prices and improved agricultural output. The MPC also noted the current high level of core inflation, which is gradually moderating.
In its assessment, the MPC pointed out that the real interest rate remains positive when looking 12 months ahead, and it anticipates a significant decline in headline inflation in the second half of the fiscal year 2024.
The decision aligns with the bank’s ongoing efforts to stabilize the economy and manage inflationary pressures while supporting economic growth. The MPC will continue to monitor economic indicators closely to adjust its policies as needed to maintain financial stability in Pakistan.
