Pakistan's central bank increased its benchmark interest rate by 100 basis points to its highest level ever in an effort to rein in rising consumer prices in the cash-strapped nation.
Consumer price inflation is at its highest level ever recorded, and the benchmark rate of the State Bank of Pakistan (SBP) is currently at a record high of 21%.
Global rises in consumer prices have exacerbated Pakistan's high inflation, which was already high due to the country's currency depreciation, rising energy prices, and Ramadan's impact on food prices. At well over 35% in March, Pakistan's annual consumer price inflation rate was at its highest level ever.
At least 16 people were killed in stampedes for food handouts last week as a result of the pressure that rising prices have placed on household budgets and the desperation of many.
Prices for food, beverages, and transportation have all increased by more than 45%, and the government is in discussions with the IMF to release its next tranche, worth around $1.1 billion, as part of a $6.5 billion rescue deal reached in 2019.
Early in March, the bank increased its benchmark rate by 300 basis points to 20%, outpacing market forecasts and probably doing so in order to satisfy a crucial IMF stipulation for the release of the upcoming bailout money.