THE State Bank’s decision to raise its key policy rate by 100 basis points to 11.5pc signals a shift in priorities from supporting growth to protecting macroeconomic stability, preserving exchange rate confidence, and preventing inflation from becoming entrenched amid risks arising from the Gulf crisis. Coming at a time when inflationary pressures are re-emerging and external vulnerabilities intensifying, the move reflects the assessment that risks to stability now outweigh gains from monetary easing. The decision also reveals a growing recognition of the trade-off between growth and stability. Headline inflation rose to 7.3pc in March, while core inflation edged up to 7.8pc, and is expected to stay above the medium-term target range of 5-7pc for much........

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