Karachi (Staff Report): The State Bank of Pakistan (SBP) on Friday announced monetary policy, keeping to remain unchanged at 7 percent for the next two months.
“Monetary Policy Committee (MPC) of SBP maintained policy rate at 7pc,” the central bank said in a statement and added that the current stance of the monetary policy was appropriate to support economic recovery, maintain financial stability and keep inflation expectations “well-anchored”.
“MPC viewed recent inflation uptick as primarily driven by supply side factors and saw little signs of demand-led inflation.
“As the temporary increase in inflation from administered prices subsides, inflation should fall to the 5-7pc target range over the medium-term,” the SBP said.
According to a statement by the central bank, the MPC “noted current stance of monetary policy remains appropriate to support economic recovery while keeping inflation expectations well-anchored and maintaining financial stability”.
SBP said that the committee reviewed the recent rise in inflation and concluded it was “primarily driven by supply side factors and saw little signs of demand led inflation”.
The central bank expects that as this “temporary increase in inflation” that is a by-product of “administered prices” subsides, “inflation should fall to the 5-7% target range over the medium-term”.