ISLAMABAD, Jun 27 (NNN-APP) – The Monetary Policy Committee of the State Bank of Pakistan, has increased the interest rate to 22 percent, to contain inflation.
The committee held an emergency meeting yesterday, days after deciding in a meeting on Jun 12, that, it will not increase interest rate, as the situation regarding inflation was getting better, the central bank said in a statement.
The committee said that, the interest rate needs to be revised, as inflation is likely to be increased, due to the recently passed budget for the fiscal year 2023-2024, in which the government has substantially increased taxes.
The bank added, it recently withdrew its general guidance for commercial banks on prioritisation of imports, allowing them to increase the number of imports, which may also lead to inflation.
“The Committee views that, additional tax measures are likely to contribute to inflation, both directly and indirectly, while the relaxation in imports may exert pressures in the foreign exchange market,” the statement said.
The committee reiterated that, it would continue to carefully monitor evolving economic developments and stand ready, if necessary, to take appropriate actions to achieve the objective of price stability over the medium term, it added.– NNN-APP
