The State Bank of Pakistan (SBP) on Thursday will announce its revised monetary policy rate following the central bank’s Monetary Policy Committee meeting that will review the economic indicators and their future trend on the same day.
At present, the interest rate it is 13.75 percent after a 150 basis points raise on May 23, which took the total increase to 400 bps so far this year.
The central bank usually announces its monetary policy for the next two months, but since the COVID-19 pandemic outbreak in 2019, it has come up with before-schedule MPs to intervene in emerging economic conditions at the domestic and global level. The present world scenario, especially inflationary pressures, also warrants the central bank to remain extra vigilant and responsive with corrective measures.
To make the process of monetary policy formulation predictable and transparent, the State Bank had earlier announced a half-yearly schedule of Monetary Policy Committee meetings on a rolling basis.
A year ago, in July 2021, the policy rate was 7.25 after increase of 25 bps. At the current policy rate of 13.75, SBP has fixed 14.75 percent per annum as overnight reverse repo (ceiling) rate and 12,75 percent for overnight repo (floor) rate.
It may be recalled that representative bodies of the business community of the country were un-welcoming to the last increase in the policy rate.