SBP keeps policy rate steady at 22pc
KARACHI: Amid expectations of further deceleration in average inflation to 20-22 per cent with an economic growth projection of 2-3pc for FY24, the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) has left its policy rate unchanged at 22pc for next two months. SBP Governor Jameel Ahmed announced the decision at a press conference on Monday. Most of the analysts were expecting no change in the interest rate which is too high and hampering economic activities. The MPC at its regular meeting held on June 12 left the interest rate steady at 21pc but surprised the market with a 100 basis points hike to 22pc in an unusual meeting on June 26. It is believed the rate increase was an outcome of the IMF demand just before reaching a staff-level agreement (SLA) for securing a short-term $3bn Stand-By Arrangement. Mr Jameel said the economic uncertainty had decreased since the last MPC meeting, whereas near-term external sector challenges had largely been addressed which improved investor confidence. In the Monetary Policy Statement, the MPC projected average inflation in the range of 20-22pc in FY24, down from 29.2pc in FY23.