KARACHI: The State Bank of Pakistan (SBP) — in an off-cycle review — raised the benchmark interest rate by a significant 300 basis points (bps) to 20% as Pakistan is desperate to unlock the critical $1.1 billion funding from the International Monetary Fund (IMF).
The Monetary Policy Committee (MPC) — which was constituted as a statutory committee under the State Bank of Pakistan Act — decided to increase the policy rate to its highest level since October 1996 in an attempt to “anchor inflation expectations as it is critical and warrants a strong policy response”.
The central bank raised the benchmark interest rate by 300 bps today taking the total increase to 1,050bps since January 2022 to counter rising inflation.
