SBP holds key rate for fourth time in a row

The State Bank kept the interest rate unchanged at a record 22 per cent on Tuesday for the fourth consecutive meeting, hoping to see a significant decline in inflation in the second half of the fiscal year. Most independent economists and analysts expected the central bank to hold the rate steady due to a surge in the November inflation. The bank’s monetary policy committee (MPC) said that an increase in gas prices last month could affect the inflation outlook. “The decision does take into account the impact of the recent hike in gas prices … the Committee viewed that this may have implications for the inflation outlook, albeit in the presence of some offsetting developments,” it said in a statement. In an off-cycle meeting on June 26, the SBP raised the policy rate to 22pc as a last-gasp attempt to secure a $3 billion bailout from the International Monetary Fund (IMF) as part of a reforms programme aimed at bringing stability to the economy.