Pakistan raises key rate by 300 bps, slaps Rs 3.23 power surcharge

Rate now highest in 26 years; currency falls to record low, $ bonds slump

Pakistan’s central bank raised its benchmark interest rate to 20 per cent to rein in soaring inflation that it expects to quicken further as the country works to resume a $6.5 billion International Monetary Fund bailout.

State Bank of Pakistan’s monetary policy committee increased the target rate by 300 basis points from 17 per cent, the central bank said in a statement on its website. The move was seen by 6 of 38 economists, most of whom expected a 200-basis-point hike. The current 20 per cent is the highest since June 1997 when the central bank used a different benchmark,