The State Bank of Pakistan has opted to maintain the current interest rateat 22%. This decision was disclosed following a pivotal meeting of theSBP’s Monetary Policy Committee (MPC) on Thursday.
Despite earlier forecasts by various brokerage firms suggesting a potentialinterest rate hike of up to 200 basis points, reaching 24%, the MPCobserved a deceleration in the inflation rate after its recent peak.
The decision to retain the existing interest rate takes into considerationthe latest inflation data, which demonstrates a continuous decrease ininflation, declining from 38% in May to 27.4% in August 2023. The MPC alsoexpressed confidence that rising oil prices would not hinder this downwardtrend in inflation, projecting a continued decline, particularly in thelatter part of the year.
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The central bank is optimistic about improved agricultural production andgovernment efforts to combat the hoarding and illegal smuggling of dollarsas factors contributing to this positive outlook.
