The State Bank of Pakistan (SBP) is all set to unveil its monetary policy for the next two months on November 22. Prior to the announcement of the policy, the Monetary Policy Committee of the central bank will meet to discuss and decide a new policy rate. SBP will issue the monetary policy statement through a press release on the same day. Previously, the State Bank had kept the rate of interest unchanged at 13.25 percent.
“The Monetary Policy Committee (MPC) decided to leave the policy rate unchanged at 13.25 percent. The decision reflected the MPC’s view that inflation outcomes have been largely as expected and inflation projections for FY20 have remained unchanged since the last MPC meeting on 16th July 2019,” a press release issued by State Bank of Pakistan had said. The new monetary policy noted two key developments since the last MPC meeting. First, the interbank foreign exchange market has adjusted relatively well to the introduction of the market-based exchange rate system.
The initial volatility and associated uncertainty in the exchange market had subsided added press release. According to SBP, the rupee had strengthened modestly against the US dollar, unlike its previous trend.
The State Bank also forecasted that recent economic activity indicators have shown a gradual slowdown, in line with earlier expectations. “The MPC continued to expect average growth in FY20 of around 3.5 percent.”
The MPC also noted that the SBP-IBA Consumer and Business Confidence Surveys conducted during Aug-Sep 2019 show a modest improvement in the outlook for the economy.
“The outlook for agriculture and the services sectors was largely unchanged from the time of the previous MPC meeting. The agriculture sector growth is expected to improve considerably in FY20 over the last fiscal year while growth in services is expected to moderate gradually,” said a press release.