This decision takes into account the latest inflation outturn reflecting the continuing declining trend in inflation from its peak of 38 percent in May to 27.4 percent in August 2023.
KARACHI: (UrduPoint/Pakistan Point News-Sept 14th, 2023) The State Bank of Pakistan (SBP) made a significant decision on Thursday by opting to keep the policy rate steady at 22 percent.
In accordance with an official statement released today, this decision was reached following a meeting of the bank's Monetary Policy Committee (MPC).
"The MPC decided to maintain the policy rate at 22 percent. This decision takes into account the latest inflation outturn reflecting the continuing declining trend in inflation from its peak of 38 percent in May to 27.4 percent in August 2023. Even though global oil prices have risen recently and are being passed on to consumers through adjustment in administered energy prices, inflation is projected to remain on the downward trajectory, especially from the second half of this year," stated the SBP's announcement.
The SBP's statement also added, "As such, real interest rates continue to remain in positive territory on a forward-looking basis. Moreover, the expected ease in supply constraints owing to better agriculture output and the recent administrative measures against speculative activity in the FX and commodity markets would also support the inflation outlook."
Furthermore, the MPC identified four notable developments since its previous meeting held in July. Firstly, there has been an improvement in the agricultural outlook, supported by the latest data on cotton arrivals, favorable input conditions, and satellite data indicating healthy crop vegetation.
Secondly, global oil prices have seen an upward trend, with current levels hovering above $90 per barrel. Thirdly, as anticipated, the current account recorded a deficit in July after remaining in surplus for the preceding four months, partially due to the recent relaxation of import restrictions.
The MPC emphasized its commitment to monitoring the risks associated with the inflation outlook and pledged to take appropriate action if necessary to achieve the goal of price stability. Concurrently, it stressed the importance of maintaining a prudent fiscal stance to effectively manage aggregate demand.
