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The people of Pakistan were shocked by the expensive loan, the Central Bank made the loan expensive by 2.50 percent

Interest Rate Hike In Pakistan: The economic crisis can also deepen in Pakistan, which is facing political crisis. The people of Pakistan are going to get a shock of expensive debt. Pakistan’s central bank, the State Bank of Pakistan (SBP), has announced an increase of 250 basis points in the benchmark interest rates to 12.25 percent on 7 April. A decision has been taken on this by convening an emergency meeting of the State Bank of Pakistan Monetary Policy Committee (MPC).

According to the Central Bank of Pakistan, since the last MPC meeting, the risk to global instability has increased with rising inflation. The central bank said that the Pakistani rupee has depreciated by 5 percent due to domestic political uncertainty. The SBP said the MPC had to raise interest rates from 9.75 per cent to 12.25 per cent due to several external factors, including the Russo-Ukraine war and the US tightening fiscal policy.

According to the Central Bank of Pakistan, citing the future, global commodity prices, including oil, are likely to remain higher for a longer period and the Federal Reserve may raise interest rates more rapidly than previously expected. Due to this, the inflation rate has been revised upwards to 11 per cent in 2022. At the same time, the current account deficit is still expected to be around 4 percent of GDP in FY 2022.

The central bank said that the Monetary Policy Committee believes that a reduction in domestic political uncertainty and appropriate fiscal policies will help ensure that Pakistan’s strong economic recovery remains sustainable.

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