Pakistan had not seen that for twenty-seven years.
On Wednesday, the Central Bank (State Bank of Pakistan, SBP) raised its key rate to 20% with an increase of 3 points at once.
The institution believes it has no other choice given the explosion of inflation which reached 31.5% last month.
And it's not over.
The SBP
"expects inflation to continue in the coming months,"
said the monetary policy statement, which points to two factors.
First, the federal government passed increases in indirect taxes on February 20.
Fuels, cigarettes, drinks, imported products, plane tickets… The list is long and should bring in 170 billion rupees (609 million euros) by the end of the fiscal year 2022-2023 which ends on 30 June.
Islamabad hopes to satisfy the IMF, from which it is requesting a loan of 1.1 billion dollars.
Then, the Central Bank points to the fall of the rupee against the dollar.
This one lost almost 20%…
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