Pakistan keeps interest rate unchanged

“The State Bank is aware of the delicate balance that needs to be struck between risks to inflation and economic growth,” said the State Bank governor. – File Photo

KARACHI: Pakistan’s central bank on Saturday kept its benchmark interest rate unchanged at 14 percent, while asking the government to spell out a clear and coherent strategy for the economy.

The governor of the State Bank also blamed government lending for adding to the country’s rising inflation, which has been exacerbated by a huge floods.

Pakistani stocks close near a 29-month high; rupee firms

Pakistan's central bank on Monday announced an increase in its key policy rate to 14 per cent from 13.5 percent. — File Photo

KARACHI: Pakistani stocks, led by the energy sector, ended near a 29-month high on Tuesday despite an increase in the key policy rate the previous day, which dealers said had been factored in by the market.

Pakistan’s central bank on Monday announced an increase in its key policy rate to 14 per cent from 13.5 percent to combat persistent inflation due to government borrowing from the State Bank of Pakistan.

Govt sets new record of borrowing

"The serious shortage of revenue compelled the government to borrow from the banking system." — File Photo

KARACHI: The government has geared up its efforts to borrow from both the State Bank and scheduled banks accumulating the domestic debt to record new peaks as it added over Rs800 billion in a year.

It looks that the government is in a fix as higher borrowing from the State Bank attracts stern warning from the International Monetary Fund (IMF) while borrowing from schedule banks catches the attention of State Bank.
The IMF restricts government borrowing from the Central Bank as it is inflationary while borrowing from scheduled banks is criticised by the SBP which is issuing cautions that borrowing leaves little room for private sector credit growth.