SBP raises policy rate by 50bps to 12%

The State Bank of Pakistan raised its policy rate by 50 basis points to 12% on Monday, the first increase since April, The Express Tribune reported. Nine of the Monetary Policy Committee’s 10 members backed the move, as higher energy costs and global commodity prices heightened inflation and external-account concerns.

Governor Jameel Ahmad said crude oil was near $100 per barrel and that bringing inflation down to earlier expectations would take longer. The SBP projects the current account deficit at 0% to 1% of GDP, remittances of $44 billion to $45 billion, exports of $32.5 billion to $33 billion and an import bill of about $71 billion for the current financial year.