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Monetary policy: SBP holds interest rate at 22%



In line with market expectations, MCP leaves benchmark interest rate unchanged for the next one and half month.

  • MPC’s decision is in line with market expectations.
  • Interest rate unchanged for next one-and-half month.
  • MPC says inflation rose in September 2023 as expected.

The State Bank of Pakistan (SBP) Monday decided to hold the key policy rate at 22%, in line with the market expectations, with the next announcement on December 12.

In a statement, the central bank said: “At its meeting today, the Monetary Policy Committee (MPC) decided to maintain the policy rate at 22 percent.”

The committee noted that headline inflation rose in September 2023 (31.4%) as expected — a major factor in determining the key policy rate.

However, the SBP said, it is projected to decline in October and then maintain a downward trajectory, especially in the second half of the fiscal year.

The MPC expects inflation to decline significantly in October due to downward adjustments in fuel prices, easing prices of some major food commodities, and a favorable base effect. 

“The Committee also reaffirmed its earlier assessment that inflation will decline substantially from the second half of FY24, barring any major adverse developments,” it added.

The central bank acknowledged that the recent volatility in global oil prices as well as the increase in gas tariffs from November pose some risks to the FY24 outlook for inflation and the current account.

“The committee also noted some offsetting factors: These include the targeted fiscal consolidation in Q1; improvement in market availability of key commodities; and the alignment of interbank and open market exchange rates.”

The MPC noted four key developments since its September meeting —

  • The initial estimates for Kharif crops are encouraging and will have positive effects on other key sectors of the economy.
  • Second, the current account deficit narrowed considerably in August and September, which helped to stabilise the SBP’s FX reserves position amidst tepid external financing in these two months.
  • Fiscal consolidation remained on track, with both fiscal and primary balances improving during Q1-FY24.
  • While core inflation remains sticky, inflation expectations of both consumers and businesses improved in the latest pulse surveys.

The SBP said that in light of these developments, the MPC emphasised on continuing with the tight monetary policy stance.

The MPC, the statement mentioned, reiterated its earlier view that the real policy rate is significantly positive on a 12-month forward-looking basis and is appropriate to bring inflation down to the medium-term target of 5 – 7 percent by the end of FY25.

“However, the MPC noted that this outlook is based on continued fiscal consolidation and timely realization of planned external inflows,” the central bank’s statement added.

Since the last MPC meeting on September 14, when the interest rate was kept unchanged, several developments have taken place — the appreciation of rupee, decrease in petrol prices, expected inflation, decrease in the current account deficit and forex reserves.

Head of Equities at Intermarket Securities Raza Jafri told that the SBP was unlikely to rock the boat on the cusp of the International Monetary Fund (IMF) review and has unsurprisingly kept the policy rate unchanged at 22%.

However, he said, it does seem to be setting up grounds for interest rate cuts going forward, especially if the IMF review is successful and international oil prices remain under control.


April FDI in Pakistan increased to $358.8 million, according to SBP




The inflow for April was $358.8 million, up 177% from $132 million in April FY23. Still, that was 39% more than the $258 million from March.

China was the largest investor, with $439.3 million in FDI from the nation between July and April of FY24—the greatest amount—as opposed to $604 million during the same period of FY23. In April, China accounted for $177 million of the total investment.

With $51.93 and 51.89 million invested in Pakistan, the United Arab Emirates and Canada came in second and third, respectively.

The power industry was the main draw for foreign investors in FY24, which ran from July to April. This period’s FDI in the power industry was $637.5 million, compared to $776.2 million the previous year. From $338 million to $460 million this year, Hydel Power garnered more attention.

Continue reading: In FY23–24, Pakistan’s per capita income increased to $1680.

According to a separate data released on Wednesday, Pakistanis’ per capita income increased to $1680 in FY2023–2024.

The size of the national economy grew from $341 billion to $375 billion in the current fiscal year, according to figures made public by PBS.

Throughout this fiscal year, Pakistanis’ yearly per capita income increased by Rs 90,534; the monthly rise was Rs 7,544.

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OGRA forbids the purchase or sale of inferior LPG cylinders.




The 313 LPG marketing and 19 cylinder-producing companies received notices from the OGRA, which described the act of refilling inferior LPGO cylinders as harmful.

Avoid supplying LPG to unlicensed distributors, the OGRA has cautioned LPG marketing companies. Only approved distributors will be able to sell and buy LPG going forward, per the notification, which states that new SOPs have been developed for the LPG industry.

Additionally, the warning said that the decision was made in an effort to preserve both lives and the business in response to an increase in cylinder blast occurrences.

Price reductions of Rs 20 per kilogramme for liquefied petroleum gas (LPG) were implemented in Quetta on May 3.

There is a reduction of Rs 20 on LPG prices, which means that the price per kilogramme drops from Rs 280 to Rs 260.

The costs of LPG were reduced by Rs 20 per kilogramme earlier, bringing the total decrease to Rs 40 per kilogramme over a few weeks. This is something worth noticing.

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PIA announces a significant student discount.




According to an airline spokesman, the national flag carrier has recently raised the baggage allowance to 60 kg.

Currently, PIA flies one flight per week on Sundays between Islamabad and Beijing.

The discount may be useful to students who intend to spend their summer vacations in Pakistan or who wish to return home after earning their degrees.

Before, students who wanted to visit China could now receive a 27% reduction on their fares through PIA.

On Eid ul Fitr, the national flag airline also reduced the cost of domestic flights by 20% for both economy and executive economy classes.

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