KARACHI: The State Bank of Pakistan (SBP) has decided to maintain its benchmark interest rate at 22 percent without any change. The announcement was made via a statement after the meeting of the central bank’s Monetary Policy Committee (MPC) on Tuesday.
According to the statement, the Committee noted that Nov-23 inflation was higher than expected, mainly due to gas price hikes. It further maintained that it might have implications for the near-term inflation outlook.
However, there were some offsetting developments that include a recent decline in international oil prices & better agriculture output.
The MPC further maintained that the decision also considered the elevated level of core inflation, which is moderating at a gradual pace.
The statement further added that MPC evaluated that the real interest rate was optimistic on a 12-month forward-looking basis and headline inflation would be expected to decline significantly in the second half of FY24.
Expectations About Policy Rate
It is worth noting that an upward trend at the Pakistan Stock Exchange has been observed in the recent couple of weeks. Apart from other indicators, the investors were optimistic about a possible decline or no change in the policy rate and were interested in buying in the market.
The positive sentiments took the market above the 66000 benchmark with an addition of over 14000 points in just one and a half months.
