Pakistan central bank holds rates at 5.75 %
Karachi, Pakistan - Pakistan’s central bank left its interest rate unchanged in the first meeting headed by governor Tariq Bajwa, who was appointed this month after ‘miscommunication’ led to the nation’s biggest currency plunge in nine years.
The State Bank of Pakistan kept target policy rate at 5.75 per cent, Bajwa said on Saturday at a briefing in Karachi.
The decision was predicted by all 20 economists in a Bloomberg survey.
The central bank has not changed the rate since May last year, the longest streak in more than a decade, according to data compiled by Bloomberg.
The government appointed former tax agency chief Bajwa days after the Pakistani rupee plunged three per cent on July 5, a decline Finance Minister Ishaq Dar put down to ‘miscommunication’. The rupee has since recouped most of the loss.
Consumer prices rose 3.9 per cent in June, lower than 4.45 per cent estimate by economists surveyed by Bloomberg.
The nation’s current account gap more than doubled to US$12.1bn in year ended June compared with US$4.9bn year earlier. The rupee has weakened 0.9 per cent against the dollar this year.
“Economic growth is across all sectors,” Bajwa told reporters in Karachi. Though ‘the current account is a challenge’ along with the exchange rate, which the central bank is ‘working to meet’, he said.
Inflation ‘still remains subdued’ and external pressures are manageable, Shahbaz Ashraf, research head at Arif Habib Ltd said by phone before the decision.
“The central bank may go for a hike after November when inflation is expected to see an up tick,” Ashraf said.