SBP to announce monetary policy on July 16

KARACHI: State Bank of Pakistan (SBP) will announce key policy rate for next two months of July 16, 2019, a statement said on Friday.

The SBP said that the Monetary Policy Committee of the central bank would meet on Tuesday, July 16, 2019 at SBP Head Office Karachi to decide the policy rate.

In the previous monetary policy announced on May 20, 2019, the committee decided to increase the policy rate by 150 basis points to 12.25 percent effective from May 21,2019.

The decision was taken into account the considerations and the evolving macroeconomic situation, the committee noted that further policy measures are required to address underlying inflationary pressures from (i) higher recent month-on-month headline and core inflation outturns; (ii) recent exchange rate depreciation; (iii) an elevated fiscal deficit and its increased monetization, and (iv) potential adjustments in utility tariffs.

Analysts at Arif Habib Limited said that the SBP would adopt a proactive stance to increase its benchmark policy rate by 100 basis points in July 2019 to address the underlying pressure on the economy.

In its report issued on June 28, the analysts said that in addition, monetary tightening is expected on the back of i) rising inflationary pressure due to increase in prices of petroleum products, essential food items and price revision of utilities, ii) an elevated fiscal deficit and its increased monetization, and iii) recent exchange rate depreciation.

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