KARACHI -The State Bank of Pakistan (SBP) Monday decided to maintain the policy rate at 7 per cent, as SBP press release said. The SBP’s Monetary Policy Committee (MPC) its meeting noted that since its last meeting in September, the domestic recovery had gradually gained traction, in line with expectations for growth of slightly above 2 per cent in the Fiscal Year 2020-21, and the business sentiment also improved further. Nevertheless, there were risks to the outlook, it added. The committee observed that the recent rise in COVID cases in Pakistan and many other countries presented considerable downside risks. On the upside, while it could take some time to fully implement worldwide, there had been recent encouraging news on vaccine development, it added.  As regards the inflation, the MPC noted that the recent out-turns had been on the higher side, primarily due to increases in food prices. However, those supply-side pressures were likely to be temporary and average inflation was expected to fall within the previously announced range of 7-9 per cent for FY21. Taken together, risks to the outlook for both growth and inflation appeared balanced, it added.