Pakistan's central bank on Thursday (March 2) hiked key policy rate by 300 basis points. The rate was hiked to 20 per cent, the highest in last 26 years. The cash-strapped South Asian country is scrambling to fulfil another demand by International Monetary Fund (IMF) for release of USD 1.1 billion tranche which is aimed at preventing an economic meltdown.

Pakistani rupee is in a freefall mode. On Thursday, it touched a historic low of 285.09 against US Dollar.

The country is taking various steps to get aid from the global lender under a USD 7 billion loan facility, which the International Monetary Fund (IMF) is refusing unless crucial decisions are made by the government and implemented.

The policy rate hike is 100 basis points higher than the financial market consensus of 200 basis points.

In its Monetary Policy Statement, the State Bank of Pakistan said that it had revised its inflation projection to 27-29 per cent for the current fiscal year.

In its meeting in Karachi, the Monetary Policy Committee (MPC) noted that the recent fiscal adjustments and exchange rate depreciation led to a significant deterioration in the near-term inflation outlook and a further upward drift in inflation expectations, as reflected in the latest wave of surveys.

The committee expects a further rise in inflation in the next few months as the impact of these adjustments unfolds before inflation begins to decrease, albeit at a gradual pace.

During its last meeting in January, the MPC highlighted near-term risks to the inflation outlook from external and fiscal adjustments. Most of these risks have materialised and are partially reflected in the inflation numbers for February.

"The national CPI inflation has surged to 31.5 per cent year-on-year, while core inflation rose to 17.1 per cent in urban and 21.5 per cent in the rural basket in February 2023," it said.

(With inputs from agencies)

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Pakistan's central bank on Thursday (March 2) hiked key policy rate by 300 basis points. The rate was hiked to 20 per cent, the highest in last 26 years. The cash-strapped South Asian country is scrambling to fulfil another demand by International Monetary Fund (IMF) for release of USD 1.

Pakistan's central bank on Thursday (March 2) hiked key policy rate by 300 basis points. The rate was hiked to 20 per cent, the highest in last 26 years. The cash-strapped South Asian country is scrambling to fulfil another demand by International Monetary Fund (IMF) for release of USD 1.1 billion tranche which is aimed at preventing an economic meltdown. Pakistani rupee is in a freefall mode. On Thursday, it touched a historic low of 285.09 against US Dollar. The country is taking various steps to get aid from the global lender under a USD 7 billion loan facility, which the International Monetary Fund (IMF) is refusing unless crucial decisions are made by the government and implemented. The policy rate hike is 100 basis points higher than the financial market consensus of 200 basis points. In its Monetary Policy Statement, the State Bank of Pakistan said that it had revised its inflation projection to 27-29 per cent for the current fiscal year. In its meeting in Karachi, the Monetary Policy Committee (MPC) noted that the recent fiscal adjustments and exchange rate depreciation led to a significant deterioration in the near-term inflation outlook and a further upward drift in inflation expectations, as reflected in the latest wave of surveys. The committee expects a further rise in inflation in the next few months as the impact of these adjustments unfolds before inflation begins to decrease, albeit at a gradual pace. During its last meeting in January, the MPC highlighted near-term risks to the inflation outlook from external and fiscal adjustments. Most of these risks have materialised and are partially reflected in the inflation numbers for February. "The national CPI inflation has surged to 31.5 per cent year-on-year, while core inflation rose to 17.1 per cent in urban and 21.5 per cent in the rural basket in February 2023," it said. (With inputs from agencies) You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here. WATCH WION LIVE HERE ×

Pakistan: Central bank hikes policy rate by 300 basis points

The BSE Sensex surged almost 276 points to end above the key 35,000-mark on Wednesday even as the RBI hiked the policy rate by 0.25 per cent on inflation concerns.

However, the RBI retained the GDP growth forecast for 2018-19 at 7.4 per cent on hopes of further boost to investments and higher consumption.

The central bank hiked the benchmark lending rate for the first time in four-and-half-years on inflation concerns arising from a surge in international oil prices.&nbsp

The repo rate now stands at 6.25 per cent.&nbsp

The BSE Sensex, which opened strong at 34,932.49, fell after RBI's policy announcement but soon recovered to touch the day's high of 35,230.54.&nbsp

It finally ended at 35,178.88, up 275.67 points, or 0.79 per cent.&nbsp

The gauge had lost 419.17 points in the previous three sessions.

On similar lines, the NSE Nifty, after shuttling between 10,698.35 and 10,587.50, finished the session 91.50 points, or 0.86 per cent higher at 10,684.65.&nbsp

Meanwhile, domestic institutional investors (DIIs) bought shares worth a net Rs 474.33 crore, while foreign portfolio investors (FPIs) sold shares worth Rs 157.51 crore yesterday, as per provisional data.&nbsp

The central bank hiked the benchmark lending rate for the first time in four-and-half-years on inflation concerns arising from a surge in international oil prices.

The BSE Sensex surged almost 276 points to end above the key 35,000-mark on Wednesday even as the RBI hiked the policy rate by 0.25 per cent on inflation concerns. However, the RBI retained the GDP growth forecast for 2018-19 at 7.4 per cent on hopes of further boost to investments and higher consumption. The central bank hiked the benchmark lending rate for the first time in four-and-half-years on inflation concerns arising from a surge in international oil prices. The repo rate now stands at 6.25 per cent. The BSE Sensex, which opened strong at 34,932.49, fell after RBI's policy announcement but soon recovered to touch the day's high of 35,230.54. It finally ended at 35,178.88, up 275.67 points, or 0.79 per cent. The gauge had lost 419.17 points in the previous three sessions. On similar lines, the NSE Nifty, after shuttling between 10,698.35 and 10,587.50, finished the session 91.50 points, or 0.86 per cent higher at 10,684.65. Meanwhile, domestic institutional investors (DIIs) bought shares worth a net Rs 474.33 crore, while foreign portfolio investors (FPIs) sold shares worth Rs 157.51 crore yesterday, as per provisional data.

Sensex soars 276 pts even as RBI hikes rate

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