KARACHI: The State Bank of Pakistan (SBP) will announce its next Monetary Policy for two months on Friday (September 13).
A meeting will be held tomorrow in which SBP will fix the basic interest rate for the next two months.
According to most analysts it is likely that SBP will keep the interest rate sustained in the next monetary policy which is going to be announced tomorrow while still expecting 50 basis points increase.
Analysts said that although the inflation rate increase to 8.5 percent but still it is below than 9 percent.
The majority of market analysts were anticipating a rate increase before the finalisation of IMF deal, but now they have revised their stances owing to the details of the Letter of Intent (LoI) submitted by the government to IMF, as it suggests the IMF has accepted the Pakistan’s request of no rate increase for the first year.
The monetary policy was last announced in June 2013. The central bank reduced the interest rates by 0.5 per cent to 9 per cent for the months of June and July.
The SBP’s decision about interest rates in the last monetary policy was both criticized and appreciated. Among those who praised the move were the trade and industry, and the investors saw a boost in the economic growth.
However, no change has been witnessed yet in the investment pattern despite 9 per cent interest rate.
Private sector remained out of bank borrowing and only working capital was borrowed. The net borrowing by the private sector at the end of the previous fiscal was almost zero.
According to the release of SBP the subsequent Monetary Policy statements will be announced during the first half of alternate months, i.e. January, March, May, July, September, and November. NNI