Karachi July 27 2023: The Monetary Policy Committee (MPC) of State Bank of Pakistan (SBP) will meet on Monday, July 31, 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.
On June 26, 2023, the MPC convened an emergency meeting to respond to increase in taxes and withdrawal of SBP general guidance for commercial banks on prioritization of imports. The MPC decided to raise the policy rate by 100 bps to 22 percent, effective 27th June 2023.
"Although the latest policy rate move from the SBP is a welcome step, the authorities have generally been sanguine about inflationary pressures quickly receding and returning to their 5–7 percent inflation target range by end-FY25. Staff emphasized that the SBP will need to continue its tightening cycle to re-anchor expectations given that inflationary pressures are expected to persist over the coming year, including because the impact of exchange rate corrections will continue to reverberate through the economy. The SBP agreed to maintain a tight monetary policy stance—higher rates and prudent use of liquidity injections— as needed, given incoming data, to achieve real positive interest rates, on a forward looking basis, and place inflation and inflation expectations on a clear downward path" states IMF in its staff report.
The fund further stress that, "At the same time, improving the monetary transmission and the monetary operation framework will be important. The SBP is also committed to not introduce new refinancing schemes and to keep the outstanding credit of the refinancing facilities below their current limits".