Lender endorses status quo in SBP’s policy rate

The International Monetary Fund (IMF) has endorsed the State Bank of Pakistan’s (SBP) decision to keep the interest rate unchanged despite a sharp deceleration in inflation. The IMF-Pakistan SBA (2nd and Final Review) Country Report made it clear that the Fund was willing to see no change in the interest rate despite demand from the stakeholders in the wake of falling inflation, which has widened the gap between the 22 per cent interest rate and expected 13 to 15pc estimated CPI in May. “The IMF staff endorsed the SBP’s Monetary Policy Committee decision to maintain the policy rate,” said the report. It is believed that the unprecedented interest rate has crippled economic growth, which is estimated to expand at 2pc in FY24 after contracting in FY23.