THE SBP’s decision to raise its policy rate by 50 basis points to 12pc was largely expected. It is also justified by growing risks to price stability. Although the increase has disappointed many businesses seeking cheaper credit, the monetary policy cannot be determined by their immediate financing needs. With global inflation proving stickier than expected, borrowing costs remaining high internationally, and domestic energy prices vulnerable to fresh external shocks, cutting or holding rates was no option. Pakistan’s recent currency stability, rising reserves and strong........

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