KARACHI: The State Bank of Pakistan (SBP) announced its bi-monthly monetary policy on Tuesday and decided to maintain its policy rate at 7 percent, according to a statement issued by the bank.
At its meeting on 27th July 2021, the Monetary Policy Committee (MPC) decided to maintain the policy rate at 7 percent. Since its last meeting in May, the MPC was encouraged by the continued domestic recovery and improved inflation outlook following the recent decline in food prices and core inflation. In addition, consumer and business confidence have risen to multi-year highs and inflation expectations have fallen.
As a result of these positive developments, growth is projected to rise from 3.9 percent in FY21 to 4 – 5 percent this year, and average inflation to moderate to 7 – 9 percent this year from its recent higher out-turns. Imports are expected to grow on the back of the domestic recovery and rebound in global commodity prices, albeit more moderately than in FY21.