KARACHI: The State Bank of Pakistan (SBP) on Friday announced to keep monetary policy rate unchanged at 7% for the third time in a row.
While addressing the monetary policy, Governor State Bank Dr. Reza Baqir said, we believe the dovish stance may continue till July with inflation to stay average within the SBP’s target range of 7 – 9% during the current fiscal year of 2020-21.
Earlier in a day, SBP’s monetary policy committee met to make a decision keeping the risks to the outlook for growth and inflation which appears balanced.
Consumer price index inflation eased to 8% in December from 8.3% in the previous month.
The SBP wants to stick to its growth projection of 1.5 to 2.5% in FY2021, a decent recovery from the dizzying 0.4% contraction in FY2020 as a result of the coronavirus lockdown.
The Covid-related uncertainty poses both upside and downside risks to the SBP’s macroeconomic projections.