- Central bank preponed its latest monetary policy announcement, but says efforts being made to enhance predictability of monetary policy actions
Amid greater volatility in economic indicators, the State Bank of Pakistan (SBP) has increased the number of Monetary Policy Committee (MPC) meetings from six to eight times a year.
The announcement came minutes after the central bank raised the key interest rate on Friday by 150 basis points, taking it to 8.75% — the highest level since April 2020.
"In continuation of efforts to make the process of monetary policy formulation more predictable and transparent in line with international best practices, the SBP has decided to increase the frequency of monetary policy reviews from six (6) to eight (8) times a year.
"This action will bring the frequency of meetings in line with that in comparable emerging markets. It will also help to enhance the predictability of monetary policy actions."
The advance calendar for the next half-year of MPC meetings will be shared at the time of the June 2022 MPC meeting, the SBP added.
It is pertinent to mention here that the SBP, which released an advance calendar of monetary policy announcements in May this year, preponed the meeting on November 26 by a week, a development that surprised followers.
Moving forward the schedule, the SBP said that the meeting was preponed in light of recent unforeseen developments that have affected the outlook for inflation and the balance of payments, and to help reduce the uncertainty about monetary settings prevailing in the market.
Pakistan has seen greater volatility in some of its indicators with inflation jumping to 9.2%, while the rupee touched its historic low on Friday. The current account deficit has widened again, adding pressure on the currency as well.