The State Bank of Pakistan (SBP) has decided to keep its policy rate unchanged at 11%. This decision reflects the central bank’s cautious stance amidst ongoing economic challenges.
SBP Governor Jameel Ahmad confirmed the move, emphasizing that inflation remains slightly below the target range of 5-7%. However, he acknowledged that inflationary pressures are beginning to build. This is largely due to the anticipated rise in energy prices and other external risks.
While some in the business community have been advocating for a reduction in the policy rate, the SBP is taking a more cautious approach. The central bank is closely monitoring the situation and prefers a gradual response to economic conditions.
Governor Ahmad stated that the SBP’s Monetary Policy Committee reviewed the external account situation in detail. Considering the potential impact of rising energy prices, the committee decided to maintain the policy rate at its current level. The aim is to balance the need for economic growth with the responsibility of controlling inflation.
By holding the policy rate at 11%, the SBP is also working to stabilize inflation expectations and ensure the long-term stability of Pakistan’s economy. The decision is in line with the SBP’s broader goal of supporting the country’s ongoing economic recovery while managing inflation.
The SBP’s latest decision underscores its commitment to a balanced monetary policy. As Pakistan navigates through economic uncertainty, the central bank’s approach aims to maintain stability and promote sustainable growth. The decision also aligns with the broader objectives of managing inflation and safeguarding the economic recovery process.
In summary, the SBP’s decision to keep the policy rate at 11% reflects its cautious yet strategic approach to balancing inflation control with economic growth during uncertain times.
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