declaring that the media's reporting concerning the meeting of the Monetary Policy Committee is "completely baseless"

An undated image of the State Bank of Pakistan (SBP) building. — AFP

The Monetary Policy Committee (MPC) was rumored to hold an emergency meeting despite the local currency's continued depreciation against the US dollar, but the State Bank of Pakistan (SBP) dismissed the rumors on Friday.

The central bank issued a statement claiming that "the media reports circulating about the holding of an emergency meeting of the SBP Monetary Policy Committee (MPC) are completely baseless."

The announcement was made as the value of the rupee dropped to Rs305.54, down from Rs1.09 on Thursday's interbank rate, and while the open market rate for the dollar is over Rs320.

On Thursday, the Pakistan Stock Exchange (PSX) also experienced a carnage as the benchmark index plummeted over 2% on worries about the nation's deteriorating economic situation.

Concerned about impending economic turbulence, investors sold their shares in response to the rising rupee-dollar parity.

It was rumored that the SBP would call an emergency MPC meeting to review the main policy rate in an effort to arrest the depreciation of the local currency as the uncertainty had a negative impact on the economy.

In response to the reports, the SBP stated that it would be premature to predict the policy rate for the future because only the MPC, an independent statutory body, has the authority to determine the policy rate.

The statement continued, "The MPC's next meeting is scheduled for September 14, 2023, during which it will assess the state of the economy and make the appropriate decisions."

The SBP expressed optimism that inflation will progressively decline in the upcoming months on July 31, keeping its target rate at 22%.

Many were startled by the SBP's decision to keep the policy rate unchanged since the International Monetary Fund had urged for further tightening to reduce pricing pressures.