Pakistan cenbank leaves key rate unchanged as widely expected

Pakistan's central bank kept its key interest rate unchanged on Monday, in line with investor and market expectations, as the cash-strapped country remains focused on reducing record-high inflation.

The key rate of the State Bank of Pakistan (SBP) remains at 21%, its highest ever. It has been raised by a massive 1125 basis points since April 2022. The monetary policy committee "views inflation to have peaked at 38% in May 2023, and barring any unforeseen developments, expects it to start falling from June onwards", the SBP said in a statement.

The committee expects "domestic demand to remain subdued amid tight monetary stance, domestic uncertainty and continuing stress on external account".