Pakistan raises discount rate to 9.5 per cent

ISLAMABAD: Pakistan’s central bank raised its key discount rate to 9.5 per cent from 9.0 per cent on Friday, in line with requirements set by the International Monetary Fund.

The decision was announced by State Bank of Pakistan (SBP) Governor Yaseen Anwar while unveiling the bank’s monetary policy statement at a press conference.

Referring to seeking of US$6.6 billion loan from International Monetary Fund (IMF), the governor held previous elected government responsible for it.

“Past government took certain good steps but it deferred to take difficult monetary decisions to ensure financial discipline. Thus, we had no option but to resort to IMF,” he responded to a query from the media.

He appreciated the present government’s economic/fiscal policies and approach and acknowledged that it has started by taking very aggressive decisions and hoped to continue moving in the right direction and bring financial discipline in the country.

Analysts had widely expected the State Bank of Pakistan to raise its monetary policy rate – a rate at which banks borrow from it through its discount window – at some point this year in order to tighten Pakistan’s monetary supply.