SBP maintains policy rate status quo for sixth straight meeting | Maqvi News

The Monetary Policy Committee (MPC) has decided to keep the policy rate unchanged at 22%, the State Bank of Pakistan (SBP) said on Monday, adding that the continuity required to bring inflation down to targeted range of 5-7% by September 2025.

The MPC, at its meeting today, noted that inflation, in line with earlier expectations, has begun to decline noticeably from H2-FY24. It also observed that despite the sharp deceleration in February, the level of inflation remains high and its outlook is susceptible to risks amidst elevated inflation expectations.

Citing indicators, the central bank’s committee decided to continue the current monetary stance required bring inflation down to the target range of 5-7% by September 2025.

As per the SBP statement, the MPC reiterated that this assessment is also contingent upon continued targeted fiscal consolidation and timely realisation of planned external inflows.

The committee also discussed a few key developments since its last meeting, which have implications for the macroeconomic outlook.

First, the latest data continues to depict moderate pick-up in economic activity, led by rebound in agriculture output.

Second, the external current account balance is turning out better than anticipated and has helped maintain FX buffers despite weak financial inflows.

Third, while inflation expectations of businesses have shown a steady increase since December, those for consumers have also inched up in March.

Lastly, on the global front, while the broader trend in commodity prices remained benign, oil prices have increased; partly reflecting the continued tense situation in the Red Sea.

More to follow…