An announcement has been made by the Monetary Policy Committee (MPC) of the State bank of Pakistan (SBP) that the interest rate has increased by 100 basis points (bps) of 17%. This interest rate has been the highest in more than 24 years since October 1997. The reason behind this is an increase leads to the crisis mounts.
The State Bank’s decision to raise its benchmark interest rate by 100 basis points (bps), bringing the total January 2022 increase to 750 basis points to contain rising inflation.
The MPC – constituted as a statutory committee under the State Bank of Pakistan Act – stated that this rise in the main interest rate is for three main reasons for economic development: