Pakistan’s central bank maintains a 22% interest rate despite a concerning increase in inflation
NEW DELHI: The central bank of Pakistan retained the benchmark interest rate at 22% for the sixth consecutive term on Friday, as the country’s inflation rate alarmingly hit 32.89%.
The central bank said, “Inflation warrants a cautious approach and requires continuity of the current monetary stance to bring inflation down to the target range of 5–7% by September 2025,” characterising the action as an attempt to lower the rates of inflation to 5-7% by September 2025.
This comes only two weeks after the new administration was elected, when the cash-strapped country saw a 1.35 percent spike in weekly inflation, a noteworthy development, according to the Sensitive Price Indicator (SPI).
The statistics department’s data shows that the costs of 18 necessities have increased, the prices of 14 goods have decreased, and the prices of 23 products have remained unchanged.
Furthermore, as reported by ARY News, Pakistan has started talks with the foreign lender on the last USD 1.1 billion tranche under the SBA programme. During the discussions, Pakistan is anticipated to look for a new agreement under the 36-month Extended Fund Facility (EFF). According to sources, Pakistan could ask the IMF for a new loan programme of USD 6–8 billion.
