Pakistan's central bank raises key rate by 100 bps to contain inflation

Pakistan's central bank raised key rate by 100 basis points as expected as it struggles to rein in persistently high inflation.

Eighteen of the 22 economists and market watchers surveyed by Reuters had said there would be a hike -- 14 of them predicted 100 basis points (bps), three expected 200 bps, and one said 150 bps. Four respondents expected rates to remain unchanged.

"The committee found that the 1% increase was inevitable," central bank chief said in his statement.

In its last policy meeting in November the bank unexpectedly pushed up the rate by 100 bps to 16%. It has now raised rates by a total of (625 + today's) bps since January 2022.