SBP likely to raise interest rates by 2% in bid to unlock IMF programme

The State Bank of Pakistan (SBP) is planning to increase interest rates by 2% during its upcoming Monetary Policy Committee (MPC) meeting in a bid to secure the International Monetary Fund (IMF) programme.

The IMF had demanded that Pakistan raise its interest rates by 4% to tackle inflation, but the SBP had previously raised interest rates by 2%.

The Shehbaz Sharif-led government is under pressure to secure funding, but the IMF has not been satisfied with previous efforts.

The SBP's MPC will meet on April 4 to review the interest rate, and it is expected that they will increase rates by 2% as per the IMF's demand. The SBP had previously increased the monetary policy rate by 300 basis points to 20% on March 2 due to inflation concerns.