A. 10.5%
B. 11%
C. 12%
D. 13.5%

Explanation:

The State Bank of Pakistan raised its policy rate by 50 basis points to 12%. Dawn reported that the decision was intended to keep inflation expectations anchored, limit the wider effects of supply shocks and bring inflation within the central bank’s target range of 5–7%.

Important points

• – The central bank is the State Bank of Pakistan (SBP).
• – 100 basis points equal one percentage point.
• – A 50-basis-point increase equals 0.5 percentage points.
• – Higher interest rates can help contain inflation but may also increase borrowing costs.

Related questions and answers

– Q: What is monetary policy?

A: Central-bank actions that influence interest rates, credit and economic conditions.

– Q: What is inflation?

A: A sustained increase in the general price level.

– Q: What is the SBP’s main role?

A: To manage monetary policy, support price stability and perform other central-banking functions.