ISLAMABAD, Oct. 26 (Xinhua) -- The State Bank of Pakistan (SBP) on Monday raised its key policy rate by 50 basis points to 12 percent, citing rising risks to inflation and the macroeconomic outlook.
The decision was taken by the central bank's Monetary Policy Committee, which noted that the intensification of the conflict in the Middle East, low prospects for its near-term resolution and worsening El Nino conditions were keeping global commodity prices at elevated levels.
The SBP said proactive monetary policy tightening has helped contain the impact of global shocks on Pakistan's domestic economy. However, the inflation outlook has deteriorated and risks to the macroeconomic outlook have increased.
The central bank said the latest rate increase was aimed at keeping the real policy rate adequately positive on a forward-looking basis and bringing inflation within its medium-term target range of 5 to 7 percent.
The policy rate now stands at 12 percent, up from 11.5 percent previously. ■
