State Bank of Pakistan (SBP) has maintained status quo third time in a row, keeping the interest rates steady at 7%. SBP governor, Dr Reza Baqir, is said to have indicated that the centre would keep interest rates on hold in the near future as it seeks to balance economic headwinds from the Covid-19 pandemic with the need to curb inflation. “The (Monetary Policy Committee) felt that the existing accommodative stance of monetary policy remained appropriate to support the nascent recovery while keeping inflation expectations well-anchored,” according to SBP.
But what is more important has emerged from this monetary statement is SBP’s decision to provide guidance that it has planned to keep interest rates unchanged “in the near term” in the absence of “unforeseen development”. This will certainly help reduce uncertainty that the pandemic has caused everywhere. The central bank, in my view, deserves a lot of praise.
JAWED KHAN (KARACHI)
Copyright Business Recorder, 2021