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