Pakistan’s central bank raises the Interest Rate by 300 bps as country faces greatest inflation in 50 years

Pakistan’s central bank hiked its benchmark interest rate by 300 bps on Thursday. Surpassing investor forecasts

As the cash-strapped government strives to persuade the International Monetary Fund (IMF) to release essential loans.

In this backdrop, the MPC stressed the importance of anchoring inflation expectations and the need for a robust policy response.

Pakistan’s CPI Increases

According to Suleman Maniya, head of advisory at Vector Securities. While the govt must quickly concentrate on boosting the supply side, notably of agricultural & food commodities.

In February, Pakistan’s CPI increased 31.5% over the previous year due to increases in the cost of food, beverages, and transportation that exceeded 45%.

The IMF’s next tranche might be unlock with today’s currency decline and policy rate increase.

The MPC also chose to change the date of its subsequent meeting from the originally planned Apr 27 to Apr 4.