Karachi: The State Bank of Pakistan (SBP) has increased the policy rate by 1 percentage point to 11.5% in its Monetary Policy Committee meeting.
This increase has been made for the first time in almost three years.
According to the central bank, this decision has been taken due to rising global inflation, rising oil prices and the tense situation in the Middle East, which has increased the pressure on a country with an import economy like Pakistan.
The Monetary Policy Committee said in its statement that the ongoing tensions in the region have increased global energy prices, shipping charges and insurance premiums to an extraordinary extent, the effects of which are now being reflected on the domestic economy.
The statement further said that the inflation rate in March reached 7.3 percent while core inflation reached 7.8 percent, and it is expected to increase further in the coming months.
According to the committee, there has been an improvement in GDP, but external instability and global supply chain problems remain a threat to the economy.
The State Bank clarified that a tight monetary policy is necessary to control inflation and maintain economic stability.
