Business News

State Bank of Pakistan

SBP to review 7pc policy rate on January 22

KARACHI: The State Bank of Pakistan (SBP) on Tuesday said that it will review the existing key policy rate at 7 percent on January 22, 2021.

The SBP said that the Monetary Policy Committee of the SBP will on Friday, January 22, 2021 at SBP Karachi to decide about Monetary Policy.

Governor State Bank of Pakistan, Dr. Reza Baqir, will give a press conference on the same day after the MPC meeting.

The SBP in its MPC meeting on November 23, 2020 decided to maintained policy rate at 7 percent.

The SBP decided to maintain policy rate noted that since the last meeting in September, the domestic recovery has gradually gained traction, in line with expectations for growth of slightly above 2 percent in FY21, and business sentiment has improved further.

Nevertheless, there are risks to the outlook. The recent rise in Covid cases in Pakistan and many other countries presents considerable downside risks.

On the upside, while it could take some time to fully implement worldwide, there has been recent encouraging news on vaccine development.

On the inflation front, recent out-turns have been on the higher side, primarily due to increases in food prices. However, these supply-side pressures are likely to be temporary and average inflation is expected to fall within the previously announced range of 7-9 percent for FY21.

Taken together, risks to the outlook for both growth and inflation appear balanced.