“Central bank likely to raise interest rate in next review.”

The State Bank of Pakistan (SBP) is expected to increase the interest rate by 100 basis points (bps), to 21%, in its upcoming policy review to tackle rising inflation, according to a brokerage firm. The SBP’s monetary policy committee will convene on April 4th to make its decision. The rupee has declined by 1.2% against the dollar since the last monetary policy announcement in March, while the current account deficit has reduced to $242 million in January, mainly due to lower imports. Raising the policy rate will help control inflation and facilitate the ninth review with the IMF, which is critical for Pakistan to receive a tranche of $1.2bn and unlock further inflows from other international creditors.