The Monetary Policy Committee (MPC) of the State Bank of Pakistan has maintained the policy rate at 7 percent.
This time, once again the MPC of the State Bank of Pakistan has decided to remain unchanged the policy rate at 7pc. It is the fourth time that the central bank has kept its policy rate unchanged. As per the Central Bank issued a statement “MPC of SBP maintained the policy rate at 7pc,”
It added that the current position of the monetary policy was appropriate to support economic recovery, maintain financial stability and keep inflation expectations “well-anchored”.
Monetary Policy Committee (MPC) viewed the recent increase uptick as primarily driven by supply-side factors and observed the little signs of demand-led inflation.
SBP, in a series of Twitter posts, wrote, “MPC of #SBP, maintained policy rate at 7%. MPC noted current stance of monetary policy remains appropriate to support economic recovery while keeping inflation expectations well-anchored and maintaining financial stability.”
It added, “MPC viewed recent inflation uptick as primarily driven by supply side factors and saw few signs of demand led inflation. As the temporary increase in inflation from administering prices subsides, inflation should fall to the 5-7 percent target range over the medium-term.”
It concluded, “In absence of unforeseen developments, MPC expects non policy settings to remain broadly unchanged in near term. And as recovery becomes more durable and economy returns to full capacity, any adjustment in policy rate to be measured and gradual to achieve mildly +ve real rates.”
Moreover, the MPC believed the monetary policy settings to remain “broadly unchanged” in the near term. It added by giving stress that any adjustment in the policy would be measured and continuing to achieve “mildly positive real interest rates” as recovery became stronger and the economy resumed to full capacity.