KARACHI: The State Bank of Pakistan (SBP) on Friday said that monetary policy for the next two months will be announced on September 20, 2021.
The SBP said that the Monetary Policy Committee of SBP will meet on Monday, September 20, 2021, at SBP Karachi to decide about the Monetary Policy.
It would be pertinent to mention here that SBP issued an advanced calendar of MPC meetings earlier in May 2021 through a press release (https://www.sbp.org.pk/press/2021/Pr-20-May-21.pdf) and all the meetings are being held accordingly.
The advance calendar is also available at: https://www.sbp.org.pk/m_policy/mp-calendar.asp
In the last monetary policy announcement on July 27, 2021, the Monetary Policy Committee (MPC) decided to maintain the policy rate at 7 percent.
The decision has been taken because since its last meeting in May, the MPC was encouraged by the continued domestic recovery and improved inflation outlook following the recent decline in food prices and core inflation.
In addition, consumer and business confidence have risen to multi-year highs and inflation expectations have fallen.
As a result of these positive developments, growth is projected to rise from 3.9 percent in FY21 to 4 – 5 percent this year, and average inflation to moderate to 7 – 9 percent this year from its recent higher out-turns.
Imports are expected to grow on the back of the domestic recovery and rebound in global commodity prices, albeit more moderately than in FY21.
The MPC noted that the market-based flexible exchange rate system, resilience in remittances, an improving outlook for exports, and appropriate macroeconomic policy settings should help contain the current account deficit in a sustainable range of 2 – 3 percent of GDP in FY22.
Notwithstanding this moderate current account deficit, the country’s foreign exchange reserves position is expected to continue to improve this year due to adequate availability of external financing.
Against this backdrop, the MPC felt that the uncertainty created by the ongoing fourth Covid wave in Pakistan and the global spread of new variants warrants a continued emphasis on supporting the recovery through accommodative monetary policy.
