Karachi January 20 2023: The Monetary Policy Committee (MPC) of State Bank of Pakistan (SBP) will meet on Monday, January 23, 2023 to decide about Monetary Policy.
Governor SBP, Mr. Jameel Ahmad will announce the Monetary Policy decision at a press conference on the same day after the MPC meeting.
In a poll conducted by CFA Society Pakistan “63 percent of the respondent think that SBP will hike the rate by 100 basis point and in view of 11 percent respondents interest rate will go up by 150 basis points while 8 percent think that rate could be raised beyond 150 basis points”
“Only 10 percent of the respondent think that central bank maintain the rates at 16 percent and 8 percent of them feels that interest rate can go up by 50 basis points” the survey says.
in the previous meeting, Monetary Policy Committee (MPC) decided to raise the policy rate by 100 basis points to 16 percent. That decision reflects the MPC’s view that inflationary pressures have proven to be stronger and more persistent than expected. It is aimed at ensuring that elevated inflation does not become entrenched and that risks to financial stability are contained, thus paving the way for higher growth on a more sustainable basis.
Amid the on-going economic slowdown, inflation is increasingly being driven by persistent global and domestic supply shocks that are raising costs. In turn, these shocks are spilling over into broader prices and wages, which could de-anchor inflation expectations and undermine medium-term growth. As a result, the rise in cost-push inflation cannot be overlooked and necessitates a monetary policy response. The MPC noted that the short-term costs of bringing inflation down are lower than the long-term costs of allowing it to become entrenched. At the same time, curbing food inflation through administrative measures to resolve supply-chain bottlenecks and any necessary imports remains a high priority.
