State Bank's important decision on interest rate
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The State Bank of Pakistan has opted to maintain the current interest rate at 22%. This decision was disclosed following a pivotal meeting of the SBP's Monetary Policy Committee (MPC) on Thursday.
Despite earlier forecasts by various brokerage firms suggesting a potential interest rate hike of up to 200 basis points, reaching 24%, the MPC observed a deceleration in the inflation rate after its recent peak.
The decision to retain the existing interest rate takes into consideration the latest inflation data, which demonstrates a continuous decrease in inflation, declining from 38% in May to 27.4% in August 2023. The MPC also expressed confidence that rising oil prices would not hinder this downward trend in inflation, projecting a continued decline, particularly in the latter part of the year.
The central bank is optimistic about improved agricultural production and government efforts to combat the hoarding and illegal smuggling of dollars as factors contributing to this positive outlook.
