State Bank of Pakistan announced the new monetary policy and the Interest Rates
KARACHI: State Bank of Pakistan announced the new monetary policy and the Interest Rates.
The State Bank of Pakistan has decided to keep the interest rate unchanged at 13.25 percent, saying supply side inflation continued to exert pressure on the economy.
State Bank Governor Reza Baqir said that when the monetary policy committee had decided the interest rate in July, inflation stood at 8.4 percent.
“A few months after that, inflation rate kept on increasing. It [inflation rate] kept on increasing after that. Most recently, it stood at 12.4 percent,” he said.
He said that due to “adverse supply shocks” agricultural production may decline a bit this year. “However, if you look at other sectors, the volume of production is increasing,” he said, citing the example of cement industry where the consumption and production were increasing.
The state bank governor said inflation had increased due to the increase in food prices and hike in utility bills. He said that the economic team was of the opinion that inflation will decline in the coming days to around five to six percent.
He said that inflation expectations were “stable and constant” stating that inflation would decrease but it was difficult to predict when that will happen. “We know that in the long run, inflation will decline,” he said.