Pakistan central bank ‘implicitly’ introduced new policy framework ahead of time
State Bank of Pakistan sought to avoid ‘unnecessary volatility’ in money market
The State Bank of Pakistan introduced a new policy rate in May, with a view to creating a stronger anchor for overnight rates in the money market. In its latest annual report, however, it reveals it "implicitly implemented this framework" ahead of the announcement.
On May 23, 2015, the central bank cut its reverse repo rate and repo rate, the ceiling and floor of its interest rate corridor, to 7% and 5% respectively. It also introduced a ‘target rate' at 6.5%.
It laid the groundwork for the move
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