KARACHI: Pakistan has kept its main policy rate unchanged at 7%, the central bank said on Monday, as consumer price index inflation remained close to 9%.
It is the second time that Pakistan has kept its main policy rate unchanged after cutting it 625 basis points, down from 13.25%, at the time the global pandemic hit its economy in February.
"Overall financial conditions remain appropriately accommodative, with the real policy rate remaining in slightly negative territory on a forward-looking basis," a statement from the State Bank of Pakistan said, quoting the monetary policy committee (MPC), which met on Monday.
The statement said headline inflation had fallen sharply since January but remained close to 9%, primarily driven by sharp increases in food items due to supply-side issues.
However, it said core inflation remained relatively moderate and stable, and price indexes suggested a weakening of food price momentum.
"Risks to the inflation outlook are balanced," the statement said.
Pakistan's rate remained on the high side until earlier this year, at 13.25%, primarily to contain inflation, before a series of cuts to spur economic activity amidst the pandemic.
"The MPC noted that since the last meeting in September, the domestic recovery has gradually gained traction, in line with expectations for growth of slightly above 2 percent in FY21, and business sentiment has improved further."
Pakistan's central bank keeps main policy rate unchanged at 7%
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Pakistan's central bank keeps main policy rate unchanged at 7%
- It is the second time that Pakistan has kept its main policy rate unchanged after cutting it 625 basis points
- Statement said headline inflation had fallen sharply since January but remained close to 9%
Pakistan urges developed nations, global institutions to expand role in climate financing
- Pakistan is recognized among countries worldwide most affected by climate-induced disasters
- Planning minister stresses redesigning global financial system on principles of responsibility, equity
ISLAMABAD: Pakistan’s Planning Minister Ahsan Iqbal this week called on developed nations and international financial institutions to play a greater role in helping developing countries adopt green technologies at lower costs, state-run media reported.
Pakistan has suffered frequent climate change-induced disasters over the past couple of years, ranging from floods, droughts, heatwaves, cyclones and other irregular weather patterns.
This year the South Asian country reported over 1,000 deaths from floods and landslides triggered by heavy rains and the melting of glaciers.
“He [Iqbal] said Pakistan has urged developed countries and international financial institutions to expand their role in climate financing to enable developing nations to adopt green technologies at lower costs,” state-run Associated Press of Pakistan (APP) reported on Saturday.
The minister was speaking at the Second Asia Energy Transition Summit held at Pakistani university LUMS on Saturday.
Iqbal warned that climate change is intensifying emergencies and increasing economic burdens on vulnerable countries, adding that financial incentives and concessional financing have become indispensable for sustainable climate action.
“He further emphasized the need to redesign the global financial system based on the principles of collective responsibility and equity,” APP said.
The minister noted that Pakistan has been introducing comprehensive reforms in its development agenda to promote renewable energy, solar power and green technological solutions.
The country, he said, possesses “strong solar potential,” a robust renewable energy market, a wide talent pool in engineering and science and an enabling environment for green innovation.
Pakistan has regularly urged developed countries to fulfill past pledges and provide easy access to climate funding without attaching conditions, especially at Conference of Parties (COP30) climate summits.
Islamabad was instrumental in getting the Fund for Responding to Loss and Damage (FRLD) established at the COP27 climate summit in Egypt in 2022. The Loss and Damage Fund aims to help developing and least developed countries cope with both economic and non-economic impacts of climate change, such as extreme weather events and slow-onset crises like sea-level rise and droughts.
