KARACHI: The rupee remained flat on Tuesday after the State Bank of Pakistan (SBP) lifted its key interest rate by 100 basis points to 11.5 per cent, as inflation concerns fuelled by the Middle East war had already prompted traders to price in the rate hike.
The rupee closed at 278.81 against the dollar in the interbank market, nearly unchanged from its close at 278.82 in the previous session.The rupee also ended unchanged at 280.09 per dollar in the open market.
The SBP’s latest decision to raise the policy rate underscores a clear shift toward a proactive monetary stance, prioritising macroeconomic stability over short-term growth concerns, said Chase Securities in a note.
“The central bank has signalled that inflation is likely to remain above target in the near term, justifying early action rather than delayed tightening,” it said. “Policymakers appear focused on safeguarding the economic gains achieved so far, with the view that acting sooner reduces the risk of more aggressive measures later,” it added. “Encouragingly, the SBP governor also indicated that foreign exchange reserves are projected to reach $18 billion by June, providing an added cushion to external account stability.”
