In today’s policy review meeting, the State Bank of Pakistan is expected to raise interest rates to 21% in order to reduce inflation in the crisis-hit country.
The central bank’s Monetary Policy Committee (MPC) will meet today to discuss economic concerns and decide on the key policy rate.
Officials are expected to raise the policy rate by 100-200 basis points (BPS) over the next six weeks as the country faces crippling inflation in the midst of an economic meltdown.
Last month, SBP raised its key rate by a staggering 300 basis points to a record-high level of 20 percent, in another desperate move to salvage International Monetary Fund (IMF) bailout funds.
The Pakistan Bureau of Statistics, in its report, said: “CPI inflation General, increased to 35.4% on a year-on-year basis in Mar 2023 as compared to an increase of 31.5% in the previous month and 12.7% in Mar 2022”.
On a month-on-month basis, it increased to 3.7% in March 2023 as compared to an increase of 4.3% in the previous month and an increase of 0.8% in March 2022, it said, adding that prices of food, beverages, and transport surged by up to 50 percent.
It is the highest even inflation on a year-on-year basis recorded by the bureau since it started maintaining the record of monthly inflation in the 1970s.
According to the PBS, annual food inflation in March was 47.1 percent in urban areas and 50.2 percent in rural areas. Core inflation, which is determined by food and energy prices, was 18.6 percent in cities and 23.1 percent in rural areas.
