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Key rate may go up half per cent

Monetary Policy on Nov 29
KARACHI: State Bank of Pakistan will announce on Nov 29 its monetary policy for the subsequent two months, Syed Wasimuddin, chief spokesman of the central bank said Monday.
“It is likely that the central bank will continue to hike the key policy rate, by at least 50 basis points (0.5 per cent), considering the fiscal indiscipline and to counter inflation” said Mohammed Sohail, chief executive at Topline Securities Ltd.
In the last monetary policy review on September 29, the central bank increased its key policy rate by 50 basis points to 13.5 per cent in a bid to curb deepening fiscal deficit and combat rising inflation.
State Bank of Pakistan governor, Shahid Kardar said government had borrowed 184 billion rupees ($2.15 billion) from the central bank since July 1, added this can fuel inflation as it increases money supply.
“Inflation for next month could be between 17 per cent and 18 per cent due to a hike in sugar prices and electricity tariffs, which means the central bank could further hike the policy rate,” said Khalid Iqbal Siddiqui, director at Invest and Finance Securities Ltd. -Reuters


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