The SBP has once again announced to maintain the interest rate at 22%.
According to the statement of the SBP, the monetary policy committee meeting has decided to maintain the interest rate.
According to the State Bank, the economic growth will be 2 to 3 percent this fiscal year and the performance of the agricultural sector is important in the economic growth.
The central bank says that inflation has started to come down as expected, and the continuation of the current policy is necessary to bring inflation down to 5-7 percent by September 2025, while the rate of inflation stood at 23.1 percent in February.
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It should be noted that the State Bank of Pakistan had announced to increase the interest rate to 22% on June 26, 2023, since then the interest rate in the country has remained at 22%.
The committee also discussed a few significant events that have occurred since its previous meeting and could affect the macroeconomic outlook.
First, the most recent data shows that economic activity has moderately increased, with a comeback in agricultural output leading the way.
Second, despite weak financial inflows, the external current account balance is doing better than expected and has assisted in maintaining FX buffers.
Third, while corporate inflation expectations have been rising steadily since December, consumer inflation expectations have also been rising slightly in March.
Last but not least, the ongoing unrest in the Red Sea has contributed to an increase in oil prices globally, even though the overall trend in commodity prices has remained benign.
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