Central Bank Not Planning to Hike Policy Rate: SBP Governor

State Bank of Pakistan (SBP) Governor Jameel Ahmad on Thursday said that right now the central bank has no intention to increase the policy rate.

Responding to a question from a reporter about the possibility of an increase in policy rate by holding an emergency Monetary Policy Committee (MPC) meeting, the governor said that the central bank has no such plan.

The latest meeting of the MPC held on September 14 decided to keep the interest rate unchanged at 22 percent, despite many analysts predicting an increase of up to 2 percent.

In its statement, the MPC said that this decision takes into account the latest inflation outturn reflecting the continuing declining trend in inflation from its peak of 38 percent in May to 27.4 percent in August 2023.

It added that even though global oil prices have risen recently and are being passed on to consumers through adjustments in administered energy prices, inflation is projected to remain on a downward trajectory, especially from the second half of this year. As such, real interest rates continue to remain in positive territory on a forward-looking basis.

Moreover, the expected ease in supply constraints owing to better agriculture output and the recent administrative measures against speculative activity in the FX and commodity markets would also support the inflation outlook.

According to the Advance Calendar of Monetary Policy Committee Meetings, the next MPC meeting is scheduled to be held on October 30.

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