Pakistan Moves Up Rate-Setting Meeting After Rupee Tumbles

(Bloomberg) -- Pakistan’s central bank advanced its rate-decision meeting by a week after its currency fell to a record low and is Asia’s worst performer. 

The monetary policy committee will meet Nov. 19 instead of the previously announced Nov. 26, State Bank of Pakistan said in a statement Tuesday. The decision has been taken because of “unforeseen developments that have affected the outlook for inflation and the balance of payments, and to help reduce the uncertainty about monetary settings prevailing in the market,” it said.

The rupee has been weakening as Prime Minister Imran Khan’s government battles Asia’s fastest inflation and delays in agreeing a bailout from the International Monetary Fund. The central bank raised its policy rate by 25 basis points to 7.25% in September, following several measures to ease demand. 

“There is a possibility that we may have to take more measures to curb demand,” Deputy Governor Inayat Hussain told a parliamentary committee, according to a report in the Express Tribune. The central bank’s rate committee “can also take appropriate actions” to contain inflation, he said. 

Pakistan’s rupee strengthened 0.7% to 173.625 a dollar Wednesday, paring its fall to 9.9% since June. The benchmark KSE-100 Index declined 0.3% as of 10:40 a.m. local time.

“It’s been moved forward because the current account deficit is moving up fast, global commodity prices have gone nuts, and that has led to currency devaluation,” said Ahfaz Mustafa, chief executive officer at Ismail Iqbal Securities Pvt. 

The SBP could increase the policy rate by 100 basis points on Friday because of increasing inflationary pressures and tightening adopted across emerging markets, said Mustafa. 

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