Pakistan confronts inflation with 100bp hike

state-bank-of-pakistan-sbp
The State Bank of Pakistan
Photo: SBP/Abbas Ali Khan

The State Bank of Pakistan raised the country’s policy rate by 100 basis points to 9.75% on December 14. The SBP monetary policy committee cited high inflation and a balance-of-payments deficit in its decision to increase the rate.

However, it also indicated that it may pause the recent cycle of policy tightening.

The MPC raised rates at its last two meetings, starting with a 25bp hike in September and followed by a 150bp increase in November.

In its monetary policy statement, the committee

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