KARACHI: The State Bank of Pakistan (SBP) has altered its monetary policy announcement date, advancing it to November 19, 2021, from the initially scheduled date of November 26, 2021.
The decision was made by the Monetary Policy Committee (MPC) of the SBP, as announced in a statement on Tuesday.
The MPC, which typically convenes to review and decide on monetary policy, will gather in SBP Karachi on Friday, November 19, 2021. The change in the meeting schedule was prompted by recent unforeseen developments impacting the inflation outlook and balance of payments. The move aims to address the growing uncertainty in the market regarding monetary settings.
The committee will assess these developments and make decisions pertaining to monetary policy. The SBP will release the Monetary Policy Statement through a press release on the same day as the meeting.
During its last meeting on September 20, 2021, the MPC opted to increase the policy rate by 25 basis points, setting it at 7.25 percent. Notably, the committee acknowledged that the economic recovery has outpaced expectations since its previous meeting in July. The robust rebound in domestic demand, coupled with elevated international commodity prices, has led to an upsurge in imports and an increase in the current account deficit.
Although year-on-year inflation has shown a decline since June, the MPC expressed concerns that rising demand pressures, combined with higher imported inflation, could manifest in inflation readings later in the fiscal year. Despite the challenges, there are positive signs that the latest COVID-19 wave in Pakistan is under control, with ongoing progress in vaccination and effective pandemic management by the government.
As the country navigates through the more mature stage of the economic recovery, the MPC emphasizes the need for a well-balanced policy mix to sustain growth, anchor inflation expectations, and mitigate the growth in the current account deficit. The upcoming meeting on November 19, 2021, will provide a crucial platform for the MPC to reassess the economic landscape and make decisions that will shape the monetary policy direction in response to the evolving challenges and opportunities. Stakeholders across various sectors will be closely watching for insights into the SBP’s strategies to maintain economic stability in the face of changing global and domestic conditions.
