SBP keeps key policy rate at 22%

The State Bank of Pakistan (SBP) has kept the key policy rate unchanged at 22%, the Monetary Policy Committee (MPC) confirmed Monday.

This is the sixth successive decision to maintain the status quo.

“At its meeting today, the MPC decided to keep the policy rate unchanged at 22%,” it said in a statement. “In approaching the decision, the MPC noted that inflation, in line with earlier expectations, has begun to decline noticeably from H2-FY24.

The MPC noted that despite the sharp decline in February, inflation remains at elevated level. The inflation outlook is also susceptible to risks amidst elevated inflation expectations.

The MPC assessed that these circumstances warrant a cautious approach and continuity of the current monetary stance to bring inflation down to the target range of 5 – 7 percent by September 2025.

Read full statement here.

The statement said the MPC has reiterated that this assessment is also contingent upon continued targeted fiscal consolidation and timely realisation of planned external inflows.

The central bank added that latest data continues to depict moderate pick-up in economic activity, led by rebound in agriculture output.