Pakistan increases policy rate by 150 basis points to 13.75 pct to contain inflation
Source: Xinhua | 2022-05-24 | Editor:Christine
The State Bank of Pakistan (SBP) has announced to increase the benchmark policy rate by 150 basis points to 13.75 percent to keep inflation expectations anchored and contain risks to external stability.
The country's central bank issued a statement on Monday saying that a meeting of the monetary policy committee decided to raise the policy rate to help moderate demand to a more sustainable pace.
Earlier in April, the SBP's monetary policy committee had a meeting and announced an increase of 250 basis points in the policy rate.
"Since the last meeting, estimates suggest growth in the fiscal year of 2022 has been much stronger than expected. Meanwhile, external pressures remain elevated and inflation outlook deteriorated due to home-grown and international factors," said the statement, adding that demand and lingering policy uncertainty has compounded pressures on the exchange rate.
The SBP also emphasized the urgency of strong and equitable fiscal consolidation to complement monetary tightening actions to help alleviate pressures on inflation, market rates and the external account.
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