SBP announces monetary policy


Express May 24, 2010

KARACHI: The State Bank of Pakistan announced its monetary policy Monday, stating that the discount rate will remain unchanged at 12.5 per cent for the next two months.

Stakeholders in the economy had already expected SBP to keep its rate unchanged because of the resurgent inflation. Consumer prices rose unexpectedly by over 13 per cent year-on-year in April, 2010, making a cut in rates less likely.

On the other side, the stock market and financial institutions showed less activity, anticipating the rate to remain unchanged, resulting in market liquidity remaining tight.

SBP says that although the external account deficit has improved, foreign investment has been declining. The central bank has been reviewing monetary policy every two months since September last year.

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COMMENTS (4)

Esmail Yousafzai | 10 years ago | Reply Inflation is the result of mismanagement of the Govt and due to the hoarding of different commodities, interest rate doesn't have any thing to do with inflation in Pakistan. Govt have to keep a tight control on commodity market and prices of every commodity. Hike in petrol price and electricity tarrif are also the reasons for inflation. interest rate can't control inflation.
Syed A. Mateen | 10 years ago | Reply What recommendations State Bank has made to the federal government to lower the inflation rate in the country?
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