Pakistan Jacks Up Interest Rate By 300bps

BUSINESS:In an off-cycle review, the benchmark interest rate was increased by 300 basis points (bps) to 20% by the State Bank of Pakistan (SBP). This was done because Pakistan needs the crucial $1.1 billion in funding from the International Monetary Fund (IMF).

In an effort to stabilize inflation expectations, the Monetary Policy Committee (MPC) decided to raise the policy rate to its highest level since October 1996 because inflation expectations are crucial and necessitate a robust policy response.

Also Read : Pakistan To Strike Staff-Level Agreement with IMF Next Week

To combat rising inflation, the central bank increased the benchmark interest rate by 300 basis points today, bringing the total increase to 1,050 basis points since January 2022.

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