The committee held an emergency meeting on Monday, days after deciding in a meeting on June 12 that it will not increase interest rate as the situation regarding inflation was getting better, the central bank said in a statement.
The committee said that the interest rate needs to be revised as the inflation is likely to be increased due to the recently passed budget for the fiscal year 2023-2024 in which the government has substantially increased taxes.
The bank added that it recently withdrew its general guidance for commercial banks on prioritization of imports, allowing them to increase the number of imports, which may also lead to inflation.
"The Committee views that additional tax measures are likely to contribute to inflation both directly and indirectly, while the relaxation in imports may exert pressures in the foreign exchange market," the statement said.
The committee reiterated that it would continue to carefully monitor evolving economic developments and stand ready, if necessary, to take appropriate actions to achieve the objective of price stability over the medium term, it added.
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