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SBP announces monetary policy, increases interest rate to 12.25pc

SBP announces monetary policy, increases interest rate to 12.25pc

KARACHI: The State Bank of Pakistan (SBP) on Monday announced its monetary policy, increasing its benchmark interest rate by 150 basis points (BPS) to 12.25 per cent, effective from May 21.

The bank in a statement said that the monetary policy committee had noted that certain factors — possibility of changes in utility tariffs, the higher level of fiscal deficit, the recent decline in foreign reserves, and the rising inflation — merit more policy decisions.

According to the top bank, the decision was crucial to handle implications of rising inflation because of the above-mentioned causes.

Earlier this month, Dr Reza Baqir, a long-time economist with the International Monetary Fund (IMF), was appointed the governor of the State Bank of Pakistan (SBP) for a period of three years. The senior economist of Pakistani origin replaced Tariq Bajwa, who was unexpectedly removed from the post.