State Bank of Pakistan (SBP) is likely to raise the interest rate by 2 per cent at the upcoming meeting of the Monetary Policy Committee (MPC) to unlock the stalled IMF loan program.
The staff-level agreement between the International Monetary Funds (IMF) and Pakistan was scheduled to take place on February 9.
The Monetary Policy Committee (MPC) is scheduled to meet tomorrow to discuss the interest rate. The sources privy to the development said that the interest rate might be jacked up by 22pc from 20pc to meet IMF condition.
They further said that the International Monetary Funds (IMF) has demanded to take the interest rate near to the inflation rate.
Prime Minister Shehbaz Sharif-led government is taking desperate measures to get much-needed funds, but the IMF is not looking satisfied with the prior steps taken by the incumbent government.
On March 2, the State Bank of Pakistan (SBP) raised the monetary policy rate by 300 basis points to 20per cent.
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“This decision reflects deterioration in inflation outlook & its expectations amid recent external and fiscal adjustments. Monetary Policy Committee (MPC) believes this outlook warrants a strong policy response to anchor inflation expectations around the medium-term target of 5-7 percent,” the statement said.