Pakistan cenbank keeps rates at 7%, plans to stay on hold in near future

The bank has also had to balance the need to provide stimulus throughout the coronavirus pandemic with tempering inflation. Price hikes have hit consumers hard over the past year though inflation has eased since hitting a 5-year high of more than 9% late last year, with the country posting 8% consumer price inflation in December.

Pakistan's central bank kept interest rates steady at 7% on Friday, indicating that it would keep them on hold in the near future as it seeks to balance economic headwinds from the COVID-19 pandemic with the need to curb inflation. "The (Monetary Policy Committee) felt that the existing accommodative stance of monetary policy remained appropriate to support the nascent recovery while keeping inflation expectations well-anchored," the State Bank of Pakistan said in a statement.

It is the third time that Pakistan has kept its main policy rate unchanged after cutting it by 625 basis points, down from 13.25%, at the time the global pandemic hit its economy last February. The bank also provided guidance that it planned to keep interest rates unchanged "in the near term" in the absence of "unforeseen developments", adding that any changes to interest rates as the economy recovered would have to be "measured and gradual".

The result, which was largely in line with analysts' expectations, was in part due to some domestic economic improvement with the bank saying there were upside risks to the projected 2% growth projected for the 2021 financial year, which ends in June. The bank has also had to balance the need to provide stimulus throughout the coronavirus pandemic with tempering inflation.

Price hikes have hit consumers hard over the past year though inflation has eased since hitting a 5-year high of more than 9% late last year, with the country posting 8% consumer price inflation in December.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)