On June 12, the State Bank of Pakistan (SBP) maintained its policy rate at 21% amid escalating inflation and a continuing balance of payments problem that has been made worse by political unrest. The monetary policy committee said in its policy statement that it thinks the headline rate of inflation peaked in May at 38% year over year. The MPC “noted a sequential ease in inflation expectations of both consumers and businesses from their recent peaks” as well. Within the last two years, the SBP has quadrupled its policy rate.
