The State Bank of Pakistan (SBP) has decided to maintain its interest rate for banks at the previous 22%.
This was announced by SBP Governor Jameel Ahmad in a press conference on Monday evening.
He also said that the current account deficit had narrowed to 0.7%.
#LiveNow: Press Conference on Monetary Policy Decision.https://t.co/0EWaWrf4JB
— SBP (@StateBank_Pak) January 29, 2024
Governor Ahmad said the inflation rate stayed high and that the figure for fiscal year 2023-24 was revised upwards to 23-25%. He further informed the gathering that large scale manufacturing had increased, as the Monetary Policy Committee reviewed economic indicators.
He said it has been forecast that the country's economic growth will be 2-3% adding that in the future, inflation will be low and interest rates remain positive.
The governor also hinted at cuts in the interest rate in March.
Prior to the press conference, the State Bank of Pakistan's (SBP) Monetary Policy Committee (MPC) convened to decide the fate of the base interest rate. This highly anticipated meeting, the first of the year, was supposed to set the tone for the country's economic trajectory in the coming months.
SBP Governor Jameel Ahmed led the committee in deliberations on whether to maintain, raise, or lower the current policy rate of 22%. With inflation hovering above desired levels, most economists predicted the rate will remain unchanged.
Also Read: SBP set to announce monetary policy today
"The recent upward trend in inflation, particularly due to rising food and energy prices, makes a rate hike unlikely at this point," stated Dr. Ayesha Khan, a prominent economist. "However, the MPC may signal future tightening measures if inflationary pressures persist."
Businesses and consumers alike watch the policy rate closely, as it influences borrowing costs and overall economic activity. A stable rate provides predictability, while adjustments can stimulate or curb growth depending on the economic climate.
Adding to the intrigue, the State Bank also released the schedule for upcoming MPC meetings till June, offering businesses and investors a roadmap for future policy decisions.
Governor Ahmed's press conference following the meeting will be closely scrutinized for any hints about the MPC's assessment of the economy and its future plans. Today's decision will undoubtedly spark discussions and analysis, shaping financial decisions and impacting lives across the nation.
