The action by the State Bank of Pakistan (SBP) to raise its policy rate by 250 basis points has been hailed by the International Monetary Fund (IMF).
“We applaud the State Bank of Pakistan Monetary Policy Committee’s aggressive policy rate action, considering the rising inflation and heightened uncertainty that Pakistan is experiencing,” an IMF spokeswoman said in a statement to the media.
The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) hiked the policy rate by 250 basis points to 12.25 percent from 9.75 percent on Thursday. This is the largest one-shot increase since the October 1996 hike of 300 basis points.
It’s worth noting that the SBP’s MPC was supposed to meet on April 19, but the emergency meeting was called due to inflationary pressures and pressure on the external front, particularly on the reserves side.