KARACHI – State Bank of Pakistan will announce its monetary policy today on Monday, by lowering record high interest rates.
Monetary Policy Committee (MPC) of central bank is scheduled to meet today, following which bank will release the monetary policy details.
In its previous decision, State Bank kept the policy rate at 22percent, citing substantial improvements in inflation and external positions due to macroeconomic stabilization efforts.
Despite these advancements, inflation remains elevated, and risks such as geopolitical uncertainties, global commodity price fluctuations, and upcoming budget measures continue to pose challenges to the inflation outlook. The MPC aims to bring down inflation to a target range of 5-7% by September 2025.
Since the last meeting, notable changes were witnessed including moderate economic recovery with agriculture sector growing by 6.8pc and a current account surplus of $619 million in March 2024, driven by remittances.
Exports showed steady growth while imports declined, leading to stabilization of foreign exchange reserves. Fiscal consolidation efforts resulted in a primary surplus of 1.8pc of GDP, although interest payments increased due to high debt levels.
Broad money growth reached 17.1pc in March 2024, fueled by higher foreign assets and government borrowing, while credit to the private sector slowed. Inflation eased to 20.7% in March from 23.1% in February, supported by tight monetary and fiscal policies, lower global commodity prices, and improved food supplies.
MPC emphasized maintaining the current policy stance to ensure continued reduction in inflation.
How much of Policy Rate cut is expected in upcoming SBP MPC review?
