SBP keeps policy rate unchanged at 22pc

Karachi: The State Bank of Pakistan (SBP) on Monday decided to maintain its benchmark interest rate – the cost of bank lending – at 22 percent.

The Monetary Policy Committee (MPC) of the bank met and opted to keep the policy rate at 22%, which led to the announcement.

The MPC emphasized in a statement that it will maintain its tight monetary policy stance and that the "real policy rate is significantly positive on forward-looking basis to bring inflation down to 5 – 7 percent by end-FY25."

In addition, the statement stated, "MPC emphasized that maintaining fiscal consolidation and timely realization of planned external inflows are essential to achieving the medium-term inflation target."

The development comes ahead of the International Monetary Fund’s (IMF) review for the release of the second tranche of $710 million.

The central bank has raised its policy rate by a cumulative 1,500 basis points since October 2021 to curb soaring inflation and support the external balance. The rate has been on hold since July 2023.

The State Bank of Pakistan (SBP) also decided to maintain the interest rate at 22 percent at their most recent meeting in July.