Pakistan sharply increases rates on higher inflation

state-bank-of-pakistan-sbp

The State Bank of Pakistan has increased the policy rate by 100 basis points to 13.25% as inflation rises and the rupee remains weak.

“The decision takes into account upside inflationary pressures from exchange rate depreciation since the last [Monetary Policy Committee] meeting on May 20, 2019,” says the policy statement, published on July 16. The Pakistani rupee declined to 159.3 per US dollar today (July 17) from 146.7 on May 20, which follows a 21% depreciation in 2018.

In theory, the

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