On Friday, the State Bank of Pakistan (SBP) dismissed rumors that it was calling an emergency meeting of the Monetary Policy Committee (MPC) after the local currency hit a record low against the US dollar.
The central bank issued a statement claiming that “the media reports circulating about the holding of an emergency meeting of the SBP Monetary Policy Committee (MPC) are completely baseless.”
The announcement was made as the value of the rupee dropped to Rs305.54, down from Rs1.09 on Thursday’s interbank rate, and while the open market rate for the dollar is over Rs320.
On Thursday, the Pakistan Stock Exchange (PSX) also experienced a carnage as the benchmark index plummeted over 2% on worries about the nation’s deteriorating economic situation.
Concerned about impending economic turbulence, investors sold their shares in response to the rising rupee-dollar parity.
As the economy suffered from uncertainty, it was predicted that the SBP would call an emergency MPC meeting to review important policy rates and halt the depreciation of the local currency.
In response to the reports, the SBP stated that it would be premature to predict the policy rate for the future because only the MPC, an independent statutory body, has the authority to determine the policy rate.
The statement said, “The MPC’s next meeting is scheduled for September 14, 2023, during which it will assess economic developments and make pertinent decisions.”
The SBP expressed optimism that inflation will progressively decline in the upcoming months on July 31, keeping its target rate at 22%.
Many were shocked by the SBP’s decision to retain the status quo in the policy rate because the International Monetary Fund had urged for further tightening to reduce price volatility.
