Instead, the rate was hiked, making it likely that the State Bank was merely reacting to the global inflationary wave, and the hike was merely precautionary, to insulate the economy from the effects of global inflation. With the election year about to start, it is to be expected the government will do its fair share of. - Advertisement -One of the more interesting dimensions that needs exploring is how far the raising of interest rates does control inflation. The classical theory, that raising interest rates leads to lowering of inflation needs to be revisited. The assumption that Pakistan is suffering from cost-push inflation does not seem justified, as the factor of the floods does not seem to have been included in this approach.

Source: Pakistan Today November 27, 2022 02:28 UTC