SBP keeps policy rate unchanged at 22pc for fifth consecutive time
Business
In May 2023, inflation peaked at 38pc but a declining trend has been noted now: SBP
KARACHI (Dunya News) – The State Bank of Pakistan (SBP) on Monday maintained its policy rate at 22 percent for the fifth time in a row.
Addressing a press conference in Karachi on Monday, SBP Governor Jameel Ahmad said the central bank’s Monetary Policy Committee (MPC) had met earlier in the day and reviewed the current economic conditions.
“It is decided to maintain status quo,” the governor said.
Ahmad said the MPC noted Pakistan’s external account had improved, which was reflected in the country’s foreign exchange reserves.
“In the past six months, our reserves have increased to more than $8bn. Right now they are $8.3bn. This is despite the fact that we have repaid $6.2bn of principle foreign debt,” the governor said, adding that interest payments were also done.
He recalled that the current account deficit was very high in 2022 but was later contained following measures taken by the central bank and the government.
“It shrunk from 4.7pc to 0.7pc and in the first six months of the current fiscal year, it is contained and stands at $800m.
A similar trend is continuing in January as well,” the SBP governor added.
Talking about inflation, he said the MPC reviewed inflation-related developments.
In May 2023, inflation peaked at 38pc but a declining trend has been noted now. “Although it still remains elevated, inflation will start declining faster from March,” Ahmad added.
The SBP governor said the MPC committee also closely reviewed inflated gas and electricity prices that impacted the continued inflationary pressure.
“Keeping this in view, the committee has revised the average inflation assessment for the current fiscal year to 23-25pc,” he stated.
