Tuesday, August 9, 2022

SBP raises interest rates to 15%

The SBP raised interest rates by another 125 basis points to 15%.

Acting Governor SBP Dr. Murtaza Syed said in a press conference that inflation has gone up a lot, food items have become more expensive, then the government has just made a difficult decision which was the right decision to end electricity and petrol subsidies.

“This is putting a lot of pressure on the common man. The SBP and the Monetary Policy Committee are putting a lot of emphasis on controlling inflation because it is creating a lot of problems for our common man,” he said.

“Controlling inflation is now our most important goal so that our common man can get relief,” he said.

The Acting Governor said that the SBP Monetary Policy Committee has decided to increase the interest rate from 1.25% to 15%.

He said that what are the root causes of inflation in Pakistan, the first thing is that it is happening all over the world, after 1970 there was never so much inflation in the market.

He said that after the code, when the economies started recovering, the demand increased rapidly and the cost of shipping and other items started increasing.

Dr. Murtaza Syed said that it was thought that the prices would start coming down gradually but in February after the Russia-Ukraine war the prices of goods went up even more and there is also a global problem which is affecting Pakistan as well.

“Apart from this, there are a few reasons at our internal level which have led to rising inflation. The first is that in the financial years 2021 and 2022, we saw a very fast growth rate of about 6 per cent,” he said.

He said that 6% growth rate is a very good thing but if the growth rate remains at 6% for two years then the structure of our economy is such that problems start, inflation starts and the current account comes under pressure.

Dr. Murtaza Syed said that one of the reasons for our rapid growth rate was that unfortunately there will be financial expansion and because of this the demand has increased and this year the growth rate has gone up to 6% again though this year should be a little less. That is why inflation is rising.

“The current environment is very difficult and uncertain. The heads of central banks around the world are worried because inflation is rising all over the world and we have seen this kind of inflation some 50 to 60 years later,” he said.

He said that inflation is a challenge for everyone in the world and it is also a challenge for Pakistan but the way we fought the code to get out of this stage is a difficult stage because inflation is high for a year. Will remain

“If commodity prices go up, inflation will remain for a year, but we will try not to increase it further so that the mango man does not have to worry about it,” he said.



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