ISLAMABAD: The State Bank of Pakistan (SBP) on Monday announced its latest monetary policy decision, keeping the benchmark interest rate unchanged at 11.5% for the next policy period.
The policy decision was made by the Monetary Policy Committee (MPC), which considered the current state of the economy, the rate of inflation, and the situation in the external sector.
The central bank stated that due to recent geopolitical events, there has been a fall in the international price level for oil, but the prices were still higher than before the conflict started. It highlighted that the consequences of the shocks were now beginning to be seen through certain economic indicators.
According to the SBP, the rate of inflation reached the double-digit mark in April and May, with a rise in core inflation as well. On the other hand, the central bank indicated that there was moderation in economic activities because of increased prices, fiscal consolidation, and economic uncertainties.
With regard to the external side, the SBP stated that there had been less pressure on the external account recently.
Monetary Policy Committee indicated that since their last meeting, the macroeconomic environment had not experienced much change. Further, they said that the current policy setting was right and appropriate in ensuring that inflation converges into its medium-term target level which is set at 5% to 7%.
The move shows that the central bank continues to adopt a cautious approach in handling the problem.
