Pakistan holds steady on interest rates but trims FY22 GDP forecast

Pakistan's central bank held its benchmark interest rate at 9.75% on Monday and signalled that borrowing costs would remain steady for now as recent tax increases were expected to curb demand and reduce the country's budget deficit. "There's no need for further tightening at the moment because of the government's fiscal policy," State Bank of Pakistan governor Reza Baqir told a news conference in Karachi.

Pakistan's finance minister has said the tax changes would raise $1.9 billion. The MPC (monetary policy committee) was of the view that current real interest rates on a forward-looking basis are appropriate to guide inflation to