KARACHI: The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) is scheduled to announce the policy rate at 4:30 p.m. today (Monday).
Due to the present economic scenario, experts predict that the interest rate will remain at 7%.
SBP Governor Dr Reza Baqir stated in July’s policy statement that the policy rate had been held at 7 percent for more than a year to assist the economy amid the Covid-19 epidemic.
#SBP will tweet the decision of the Monetary Policy Committee at 4:30 PM today and upload it on SBP website at the same time. Follow SBP @StateBank_Pak to receive timely announcements and information from SBP.
— SBP (@StateBank_Pak) September 20, 2021
He attributed the country’s 3.94 percent economic growth to “consistent monetary policy” and other SBP efforts.
The MPC of the SBP sets the benchmark interest rate at least six times a year, depending on the state of the economy.
It is the source of the majority of the economy’s borrowing and lending. A low interest rate makes credit more accessible, therefore revving up the economy’s gears. However, it also carries the hazards of an overheating economy. As prices rise as a result of too much money, central banks raise the key interest rate to combat inflation.
The SBP has kept the policy rate at 13.25 percent since June of last year, when it was lowered from 13.25 percent in roughly three months following the outbreak of Covid-19.
Because the interest rate has stayed constant for more than a year and inflation is greater than the interest rate, monetary policy is crucial for stakeholders, notably the business sector. As a result, the real interest rate is negative.
