The State Bank of Pakistan’s (SBP) monetary policy committee, which is dueto meet on January 22, is expected to keep the policy rate unchanged at 7per cent for the third time.

SBP Governor Dr Reza Baqir will unveil the policy statement during a pressconference at SBP’s main building, according to a statement released by thecentral bank.

According to a report by a local media outlet, multiple analysts havepredicted that policy rate would remain the same after generousback-to-back reductions during last year’s lockdowns, as the risks to theoutlook for both growth and inflation appear balanced.

Analysts believe the dovish stance may continue till July with inflation tostay average within the SBP’s target range of 7pc to 9pc during the currentfiscal year (FY21).

Consumer price index inflation eased to 8pc in December from 8.3pc in theprevious month. The SBP wants to stick to its growth projection of 1.5 to2.5pc in FY2021, a decent recovery from the dizzying 0.4pc contraction inFY20 as a result of then coronavirus lockdown.

“The Covid-related uncertainty poses both upside and downside risks to theSBP’s macroeconomic projections,” the SBP said in the latest report.

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