According to a press release published by the State Bank of Pakistan (SBP) on Monday, the policy rate will remain at 15%.
The Monetary Policy Committee’s (MPC) decision was made for the following reasons, according to the statement:
The MPC decided it was reasonable to take a break at this time because recent inflation trends have been in line with forecasts, domestic demand is starting to slow down, and the external position is improving somewhat as a result of a smaller trade deficit and the restart of the IMF programme.The MPC was able to evaluate the effects of the tightening by 800 basis points since September and the budgetary consolidation slated for the fiscal year 2023 during this pause, according to the statement.
The SBP continued by saying that the measure was also consistent with previous moves made by other central banks, who it claimed had “held rates in recent meetings as global growth and commodity prices have slowed.”
The SBP stated, “It is crucial to limit the current account deficit by delivering the budgeted fiscal consolidation, cutting energy imports through energy conservation measures, and maintaining the IMF programme on track, to contain external pressures and protect the currency moving forward.
In terms of the future, it stated that the MPC expected to remain data-dependent and closely monitor variables such monthly inflation, inflation expectations, developments on the external and internal battlefields, in addition to global commodity prices and interest rate decisions by significant central banks.
