Speculation that the Monetary Policy Committee (MPC) would hold an emergency meeting was dispelled by the State Bank of Pakistan (SBP) on Friday, who claimed that the rumours were “completely baseless”.
The central bank declared on social media platform X (previously Twitter) that “the media reports making the rounds about holding of an emergency meeting of the MPC of SBP are completely baseless.”
The central bank’s announcement comes as analysts predict that the policy rate will be increased to 300 basis points in light of the weakening economy and the steady depreciation of the rupee.
The benchmark KSE-100 index of the Pakistan Stock Exchange had fallen by roughly 1,250 points, or 2.7%, the day before, with analysts primarily attributing the losses to rumours of an interest rate hike.
The SBP stated that it would be “premature to forecast the future policy rate as only the MPC, which is an independent statutory body, is empowered to decide about the policy rate” without specifically mentioning the rumours.
The statement continued by saying that the MPC would “take stock of the economic developments and take [an] appropriate decision in the matter” at the upcoming committee meeting on September 14.
The key policy rate was held at 22% by the SBP following the most recent MPC meeting in July.
The bank kept rates unchanged in June, claiming that inflation had reached a 38 percent peak the month before. However, it did so in an emergency meeting before the month of June came to an end, citing a “slightly worsened inflation outlook.”
