Karachi (PNI) In accordance with the several conditions set by the International Monetary Fund, the State Bank of Pakistan on Thursday jacked up the key interest rate — in an off-cycle review — by a massive 300 basis points (bps) taking it to a record high level of 20%. The hike is 100 basis points higher than the financial market consensus of 200 basis points.
Earlier, IMF had asked the government to hike the rate to resume the much-needed $6.5 billion loan program – which is critical to boost foreign exchange reserves and avert the imminent default on foreign debt repayments.
The State Bank of Pakistan (SBP) said in its monetary policy statement on Thursday that it has revised its inflation projection to 27 to 29 per cent for the current fiscal year against its November 2022 projection of 21 to 23 per cent for the year.
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