State Bank of Pakistan has issued the new monetary policy according to which the monetary policy committee has decided to maintain the interest policy rate at 7 percent.
According to the press release issued by SBP on Monday, it was maintaining the benchmark interest rate of 7 percent.
A statement was included after a meeting of the central bank’s Monetary Policy Committee. It stated, “The recent rise in COVID cases in Pakistan and many other countries presents considerable downside risks. On the upside, while it could take some time to fully implement worldwide, there has been recent encouraging news on vaccine development.” It also mentioned that increases in food prices continued to impact inflation, but claimed these “supply-side pressures are likely to be temporary.”
The policy also mentions that the Committee decided it was appropriate to maintain the current policy rate for financial stability, adding “lagged effects of the significant fiscal, monetary and credit stimulus injected during the pandemic should continue to shore up growth in coming quarters.”
On the other hand, the SBP also noted a further strengthening, crediting construction and manufacturing for the recovery. “Sales of Fast Moving Consumer Goods rebounded in FY21 Q1, average sales volumes of POL and automobiles have surpassed their pre-COVID levels of FY20, and cement sales are at an all-time high.”
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