The Monetary Policy Committee (MPC) of the State Bank of Pakistan has decided to keep the policy rate unchanged at 21 percent upon the expectation that the surging inflation will fall from June onwards, the central bank said in a statement.
“The MPC noted that higher inflation outturns for April and May were broadly as anticipated. The Committee also noted sequential ease in inflation expectations of both consumers and businesses from their recent peaks,” the statement said on Monday.
Earlier in April, the bank raised the policy rate by 100 basis points to the record high of 21 percent in order to curb the surging inflation.
The meeting also said that the current monetary policy stance, with positive real interest rates on a forward-looking basis, is appropriate to anchor inflation expectations and to bring down inflation towards the medium-term target, barring any unexpected domestic and external shocks.
However, the MPC emphasized that this outlook is also contingent on effectively addressing the prevailing domestic uncertainty and external vulnerabilities.
