State Bank of Pakistan to announce monetary policy tomorrow

In a Tweet from the official Twitter handle of the central bank, the bank stated, “Governor SBP Dr Reza Baqir will give a press conference on 27Jul21 at 5:15 pm to announce Monetary Policy Committee decision & share SBP’s views on outlook for economy.”

The press conference will be streamed live on the central bank’s Facebook page.

The monetary policy, in coordination with the fiscal and other relevant policies target the level of aggregate demand to achieve consistent growth.

Depending on the position of aggregate demand, the economy operates at any level of national income and employment within the production frontier. In the case of Pakistan, unemployment follows inefficient aggregate demand and it was observed in the 1990s, high inflation follows excess aggregate demand as has been observed in the middle of the 2000s.

Moreover, double-digit inflation was witnessed in the economy during the financial year 2008 to the financial year 2012.

The overall level of demand consists of both investment and consumption expenditure, which depends on the availability and cost of money, and available credit in an economy.

SBP sets policy rate and liquidity ratios (cash reserves requirements) to manage the cost and availability of money and credit (the aggregate demand) in the country.