Governor State Bank of Pakistan Dr. Reza Baqir, while announcing the monetary policy decision at a news conference in Karachi yesterday (Jan 28), said that SBP has decided to keep the policy rate unchanged at 13.25 percent for the next two months.
“The Monetary Policy Committee (MPC) noted three key developments since the last meeting on 22nd November 2019. First, the ongoing and substantial reduction in the current account deficit and the orderly conditions in the foreign exchange market after the transition to a market-based exchange rate system continued to strengthen the country’s external accounts’, SBP said in an official statement.
“Second, the IBA-SBP survey of business confidence showed an improvement in the business community’s outlook for economic activity for a third successive wave. Third, fiscal developments remained on track and in line with commitments made under the IMF-supported program, buoying the overall economic reform sentiment”, the statement added.
On the other hand, Baqir said interest rate has not been changed as inflation rate is expected to remain at 11 to 12 percent this year. However, he said, the improvements in supply are likely to reduce the inflation rate.
He said economic stability is further improving with job creation expected to rise. He said agricultural production may not meet its target this year. He said an increase of one hundred billion rupees is being made in working capital scheme.
Baqir said that the government will also introduce a new export scheme in the coming days for “small exporters” who want to innovate and create new products so that they are not left out of the incentives.
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17 November, 2019