Massive increase in interest rates on cards by SBP

Massive increase in interest rates on cards by SBP

With inflation continuing to increase, the State Bank of Pakistan could hike interest rate by as much as 300 points to 25%, a report said on Thursday.

The rate currently stands at 22% which was announced on June 26 this year. The rate is the highest in the country’s history.

However, with economic indicators worsening along with a fall in the value of the rupee and an increase in the price of petrol, inflation is expected to increase. The Bank could respond by hiking the rate to 25%, the report link said.

The meeting of the SBP’s Monetary Policy Committee is scheduled for September 14. However, emergency meetings have been convened in the past to announce increases in the interest rate.

The rate was kept unchanged in the MPC’s last meeting on Jul 31.

Controlling the interest rate is a key measure that the SBP can use to control how much money is being spent in the economy.