The State Bank of Pakistan (SBP) Governor Dr Reza Baqir called on Prime Minister Imran Khan on Thursday, where he gave a briefing to the premier over the monetary policy that will be announced tomorrow, as well as the overall economic situation.
The analysts are of the view that SBP will increase the policy rate by 50 basis points (bps) to 1% “Pakistan is preparing to go to International Monetary Fund (IMF) to re-continue its bail-out package with the Fund,” analysts claimed.
Most of the analysts believe that SBP is going to keep the interest rate at the current level. However, the inflation rate is coming down which is always considered a primary indicator while deciding monetary policy.
The CPI inflation in Jan-2021 is likely to fall around 6.0% YoY because of a high base effect. It is likely to rise to 9.5-10.0% during the second quarter of 2021, analysts added.
PM Imran was also briefed regarding Pakistan’s current account (C/A), which clocked in a deficit in December after being in surplus for the last five months. In addition to this Baqir also apprised the premier about the expected increase in exports and remittances from abroad due to government initiatives.