![\"Monetary-policy-SBP-keeps-interest-rate-unchanged-at-7%-rapidnews\"](\"https:\/\/dailyrapidnews.com\/eng\/wp-content\/uploads\/2021\/03\/Monetary-policy-SBP-keeps-interest-rate-unchanged-at-7-rapidnews.jpg\")
<\/p>\nIn line with market expectations, the State Bank of Pakistan (SBP) on Friday maintained the status quo and left the benchmark interest rate unchanged at 7% for the next two months.<\/p>\n
Market researchers had anticipated no change in the policy rate as the SBP had strongly hinted in January that it might maintain the rate at the current level of 7% in March for another two months and until the economy got back to full capacity.<\/p>\n
<\/p>\n
The SBP kept the interest rate unchanged to support businesses during the second wave of the Covid-19 pandemic.<\/p>\n
Earlier, due to the lockdown imposed to contain the spread of Covid-19 in the country, the SBP had aggressively slashed the benchmark interest rate by 625 basis points from March to June 2020 to 7%.<\/p>\n
The monetary policy is an effective tool with the central bank that is used to curb inflation. The SBP announces a target rate every two months, which serves as the benchmark for overnight funds in the interbank market.<\/p>\n
The policy rate is revised up or down or kept unchanged in relation to the inflation reading and economic activities. Low inflation leads to a reduction in the policy rate in a bid to ramp up economic activities and vice versa.<\/p>\n","protected":false},"excerpt":{"rendered":"
In line with market expectations, the State Bank of Pakistan (SBP) on Friday maintained the<\/p>\n","protected":false},"author":1,"featured_media":6890,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":""},"categories":[2],"tags":[],"class_list":["post-6889","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"yoast_head":"\n