CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Monetary Policy 2026
An external MPC member may be reappointed for:
A. Unlimited terms
B. One further term of three years
C. One further term of one year
D. No second term
Correct Answer: B
The law allows reappointment for another three-year term.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Monetary Policy 2026
An external MPC member is appointed for an initial term of:
A. Three years
B. One year
C. Five years
D. Seven years
Correct Answer: A
The SBP Act provides a three-year term for external MPC members.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Monetary Policy 2026
External MPC members are required by the SBP Act to be:
A. Serving judges
B. Military officers
C. Provincial chief secretaries
D. Economists
Correct Answer: D
Section 9D specifies that the external members shall be economists.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Monetary Policy 2026
Who appoints the MPC's external members?
A. Governor alone
B. National Assembly Speaker
C. Federal Government on the recommendation of the SBP Board
D. Supreme Court
Correct Answer: C
External members are appointed by the Federal Government on the Board's recommendation.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Monetary Policy 2026
How many external members sit on the MPC?
A. Two
B. Three
C. Four
D. Five
Correct Answer: B
The MPC includes three external members.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Monetary Policy 2026
How many SBP Board members are nominated by the Board to serve on the MPC?
A. Three
B. One
C. Two
D. Four
Correct Answer: A
Three members of the SBP Board serve on the MPC.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Monetary Policy 2026
How many senior SBP executives are nominated by the Governor to serve on the MPC?
A. One
B. Two
C. Five
D. Three
Correct Answer: D
Three senior executives of the Bank are nominated by the Governor.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Monetary Policy 2026
Who serves as Chairperson of the MPC?
A. Federal Finance Minister
B. Finance Secretary
C. Governor, State Bank of Pakistan
D. Chairman FBR
Correct Answer: C
The Governor of SBP is the MPC chairperson.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Monetary Policy 2026
The SBP Monetary Policy Committee consists of how many members?
A. 7
B. 10
C. 9
D. 12
Correct Answer: B
The MPC has ten members under the SBP Act.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Monetary Policy 2026
MPC stands for:
A. Monetary Policy Committee
B. Market Pricing Council
C. Monetary Planning Commission
D. Macroeconomic Policy Council
Correct Answer: A
The statutory decision-making body for monetary policy is the Monetary Policy Committee.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Monetary Policy 2026
The current SBP inflation target is best described as:
A. A fixed exchange-rate peg
B. A monthly money-supply ceiling
C. A legal maximum wage
D. A medium-term target range
Correct Answer: D
SBP follows a medium-term inflation range of 5–7 percent.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Monetary Policy 2026
The current monetary-policy framework is designed primarily to influence:
A. Election turnout
B. Provincial boundaries
C. Inflation and aggregate economic activity
D. Cricket rankings
Correct Answer: C
Interest rates influence borrowing, spending, investment and ultimately inflation and economic activity.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Monetary Policy 2026
Which institution sets Pakistan's medium-term inflation target that guides the SBP?
A. IMF alone
B. Government of Pakistan
C. World Bank alone
D. Pakistan Stock Exchange
Correct Answer: B
The SBP Act definition of price stability refers to the government's medium-term inflation target.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Monetary Policy 2026
Which rate can adjust quickly after an MPC decision even though the broader economy responds more slowly?
A. Overnight repo rate
B. Population growth rate
C. Literacy rate
D. Long-run productivity growth
Correct Answer: A
Short-term money-market rates can adjust quickly while output and inflation respond with lags.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Monetary Policy 2026
According to the SBP, full monetary-policy effects on growth and inflation may take approximately:
A. 1–2 days
B. 1–2 weeks
C. 10–15 years
D. 1–2 years
Correct Answer: D
SBP notes that full effects often take one to two years to materialize.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Monetary Policy 2026
Monetary policy affects the economy:
A. Instantly and fully
B. Only after a constitutional amendment
C. With a time lag
D. Only once every decade
Correct Answer: C
Interest-rate changes transmit gradually through financial conditions, spending, production and prices.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Monetary Policy 2026
Why is price stability important according to the SBP?
A. It guarantees profits to every business
B. It helps businesses and households plan saving, consumption and investment
C. It removes all exchange-rate changes
D. It fixes wages permanently
Correct Answer: B
Low and stable inflation improves the predictability needed for economic decision-making.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Monetary Policy 2026
An easier monetary-policy stance generally aims to:
A. Stimulate economic activity by reducing borrowing costs
B. Increase borrowing costs deliberately
C. Raise customs duties
D. Reduce agricultural output
Correct Answer: A
Lower interest rates can encourage borrowing, investment and consumption when inflation conditions allow.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Monetary Policy 2026
A tighter monetary-policy stance generally means:
A. Lower borrowing costs and stronger demand
B. Automatic tax cuts
C. Automatic currency appreciation
D. Higher borrowing costs and restraint on demand
Correct Answer: D
Tighter policy raises the cost of money and tends to moderate demand and inflationary pressure.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Monetary Policy 2026
Does the SBP currently set a formal intermediate target for M2 growth or the exchange rate?
A. Yes, for both
B. Yes, for M2 only
C. No
D. Yes, for exchange rate only
Correct Answer: C
SBP states that it currently does not set an intermediate target for a nominal variable such as M2 growth or the exchange rate.