KARACHI: The State Bank of Pakistan (SBP) to announce its monetary policy for the next 90 days today (Thursday) with expectation of the rate cut from 150 bps to 200 basis points.
In the previous policy announcement, the central bank had fixed the policy rate at 19.5 percent.
The Monetary Policy Committee (MPC) of the central bank meets today to fix the policy rate for the next one-and-half month.
Experts are expecting that the committee will continue monetary easing between 150-200bps, on a lower inflation outlook and improved external account.
This would be the third consecutive cut, if MPC reduced the key policy rate as the committee had lowered the policy rate by 150bps on June 26, 2024 and 100bps on Jul 29 this year.
Larger rate cut expectations in upcoming monetary policy meetings are driven by single digit inflation reading of Aug 2024 at 9.64 percent, analysts said.
Analysts are expecting that policy rate to come down to 14-15 percent in FY25.
There are some key recent improvements in macroeconomic indicators that support expectation of a rate cut.
The main factor supporting anticipated rate cut is the significant decline in inflation to single digit. Additionally, both headline and core inflation rates in Pakistan have decreased.
The business community is demanding of tangible cut in the interest rate between 300 to 500 basis points in view of the single digit inflation.
from Business News updates - Latest news stories on Economy from Pakistan
