{"id":16980,"date":"2023-06-12T17:16:42","date_gmt":"2023-06-12T12:16:42","guid":{"rendered":"https:\/\/dailyausaf.com\/en\/?p=16980"},"modified":"2023-06-12T17:16:42","modified_gmt":"2023-06-12T12:16:42","slug":"sbp-likely-to-maintain-status-quo-in-interest-rate-today","status":"publish","type":"post","link":"https:\/\/dailyausaf.com\/en\/business\/sbp-likely-to-maintain-status-quo-in-interest-rate-today\/","title":{"rendered":"SBP likely to maintain status quo in interest rate today"},"content":{"rendered":"

SBP likely to maintain status quo in interest rate today. The Monetary Policy Committee \u2014 established under the State Bank of Pakistan<\/a>‘s (SBP) Amendment Act \u2014 is expected to keep the benchmark interest rate unchanged at 21% in its announcement today.<\/p>\n

Despite the fact that inflation has remained elevated, the committee \u2014 which is empowered to take a decision keeping in view the macroeconomic fundamentals \u2014 is likely to maintain the interest rate<\/p>\n

In its last announcement in April, the MPC increased the benchmark policy rate by another 100 basis points (bps) to 21%, a record high.<\/p>\n

The central bank defended its decision by terming it a key to ensure price stability, saying it was also an important step towards anchoring inflation to the medium-term target.<\/p>\n

According to a survey conducted by Arif Habib Limited, 77.3% of respondents \u2014 belonging to various sectors, including financial and non-financial services \u2014 believe that the policy rate will remain unchanged at 21%.<\/p>\n

Meanwhile, a small number of respondents \u2014 22.7% \u2014 were of the view that the central bank would increase the policy rate by 100bps.<\/p>\n

It should be noted that the primary objective of the increase in policy rate is to discourage private-sector borrowing because any increase in currency in circulation pushes inflation higher.<\/p>\n

Read more:\u00a0SBP reminds citizens to encash withdrawn prize bonds by June 30<\/a><\/strong><\/em><\/p>\n

Pakistan\u2019s key rate has been raised by a massive 1,125 basis points (bps) since April 2022. Most analysts agree and believe that with inflation peaking and global commodity prices coming down, there was no urgent need to hike interest rates yet again.<\/p>\n

“They’ll point to a ‘plateauing of inflation’ as evidence that rates don\u2019t need to go up,” Uzair Younus, Director of the Pakistan Initiative at the Atlantic Council’s South Asia Center told media.<\/p>\n

Inflation surged to 37.97% in May, a record high for the second month in a row, and the highest in South Asia, ahead of Sri Lanka, which posted annual inflation of 25.2% in May.<\/p>\n

But Shivaan Tandon, an economist at Capital Economics, expects a 100bps hike, saying the central bank cannot afford the luxury of keeping the policy rate on hold given the need to tame record-high inflation and support the currency through monetary tightening.<\/p>\n

“Rate hikes may also prove to be a signal to potential creditors about the authorities\u2019 commitment towards resolving external imbalances,” he said.<\/p>\n","protected":false},"excerpt":{"rendered":"

SBP likely to maintain status quo in interest rate today. The Monetary Policy Committee \u2014 established under the State Bank of Pakistan‘s (SBP) Amendment Act \u2014 is expected to keep the benchmark interest rate unchanged at 21% in its announcement today. Despite the fact that inflation has remained elevated, the committee \u2014 which is empowered […]<\/p>\n","protected":false},"author":8,"featured_media":15056,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,9],"tags":[1881,572,7443,599,138],"class_list":["post-16980","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-latest-news","tag-inflation","tag-sbp","tag-south-asia","tag-state-bank-of-pakistan","tag-pakistan"],"_links":{"self":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts\/16980","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/comments?post=16980"}],"version-history":[{"count":0,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts\/16980\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/media\/15056"}],"wp:attachment":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/media?parent=16980"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/categories?post=16980"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/tags?post=16980"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}