The SBP raised the Policy Rate to 8.75%, raising it 1.5% in a sudden and unexpected move. The Monetary Policy Committee (MPC) the SBP announced increase to mitigate the risks related to inflation and external account.
TANGENT is the view that this increase in the policy rate is completely unnecessary – the inflation caused was for other reasons and not what the contractionary policy is expected to deliver. This is similar to the 2018 rate hikes, which TANGENT had been vocal about.
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