At its meeting held on 28 January 2020 in Karachi, the Monetary Politics Committee (MPC) of the State Bank of Pakistan (SBP) agreed that the policy rate would remain at 13.25%.
The Governor said MPC’s initial decision was to lift the inert rate because the rising inflationary waves were the result of the recent rises in oil, gas, and food prices in the country in the coming months. Nevertheless, it agreed to maintain the status quo because of supply side factors.
To recall, MPC held its policy rate in line with unchanged inflation numbers since the last policy was announced in its last monetary policy announcement of 22 November 2019 at 13.25%.
The findings were consistent with market expectations, whereby various observers expected that the policy rate would remain unchanged.