April 4, 2023
2 mins read

State Bank of Pakistan likely to raise interest rates

The IMF has demanded to take the interest rate near to the inflation rate….reports Asian Lite News

State Bank of Pakistan (SBP) is likely to raise the interest rate by two per cent at the upcoming meeting of the Monetary Policy Committee (MPC) to unlock the stalled IMF loan program, ARY News reported.

The staff-level agreement between the International Monetary Fund (IMF) and Pakistan was scheduled to take place on February 9. The MPC is scheduled to meet tomorrow to discuss the interest rate. The sources privy to the development said that the interest rate might be jacked up by 22 pc from 20 pc to meet IMF conditions.

They further said that the IMF has demanded to take the interest rate near to the inflation rate.

According to ARY News, Prime Minister Shehbaz Sharif-led government is taking desperate measures to get much-needed funds, but the IMF is not looking satisfied with the prior steps taken by the incumbent government.

The State Bank of Pakistan (SBP) on March 2 raised the monetary policy rate by 300 basis points to 20per cent.

“This decision reflects deterioration in inflation outlook & its expectations amid recent external and fiscal adjustments. Monetary Policy Committee (MPC) believes this outlook warrants a strong policy response to anchor inflation expectations around the medium-term target of 5-7 percent,” the statement said, according to ARY News.

The Express Tribune recently reported that Pakistan is in the middle of a deep economic crisis amid steep currency devaluation and interest rates hikes with its major debt sustainability indicators witnessing marked deterioration during the first half of this fiscal year, according to the semi-annual debt bulletin of the finance ministry.

The July-December 2022 report showed that the share of external public debt rose in the past six months, while the average time of maturity and period of resetting the interest rates have further shortened, the report said.

The Express Tribune showed that the share of external debt in the total public debt rose from 37per cent in June to 37.2 per cent by December, heightening the currency risks simultaneously with the rupee sinking and foreign countries shying away from extending loans.

This is synchronous with interest rates at historic highs and the currency devaluing by 56 per cent since the incumbent government came into power a year ago, reported The Express Tribune. (ANI)

ALSO READ: Chinese planes, naval ships detected around Taiwan

Previous Story

Karachi hit by acute water shortage during Ramadan

Next Story

Sri Lanka seeks India’s help with policy reforms

Latest from -Top News

India to Aid Ray Home Restoration in Bangladesh

India noted that the property, currently owned by the Government of Bangladesh, “is in a state of disrepair”….reports Asian Lite News The Government of India has expressed deep regret over the ongoing

Sri Lanka, India Deepen Ties

The delegation, including 24 leaders from across 14 political parties of Sri Lanka, began their two-week visit to India on Wednesday….reports Asian Lite News A 24-member Sri Lankan delegation met Foreign Secretary

Jaishankar Flags Pahalgam Attack at SCO Meet

In his address, EAM Jaishankar spotlighted that the meeting is taking place at a time of “considerable disorder” in the international system….reports Asian Lite News Highlighting the dastardly April 22 terrorist attack

Trump Sets 50-Day Ultimatum for Russia

In a major shift, US President Trump announced new military aid for Ukraine and threatened broad tariffs on Russia’s trade partners to force an end to the war within 50 days…reports Asian
Go toTop

Don't Miss

Kabul mediating between Pak, TTP, confirms Afghan FM

He expressed confidence that the talks will yield positive result,

Nawaz calls for all-party dialogue including Imran’s PTI

Nawaz said that the dialogue should also involve the state