KARACHI – State Bank of Pakistan is likely to cut interest rates as inflation eased in more than five years, providing enough space to authorities to lower policy rate.
The central bank is expected to unveil its new monetary policy on Sunday, with strong expectations of interest rate cut of up to two percentage points. This comes a notable decline in inflation, which comes below 5pc last month.
Monetary Policy Committee (MPC) will meet tomorrow on December 16 to review critical economic indicators before making a final decision on the policy rate.
Meanwhile, market experts requested State Bank to cut policy rate to single-digit figure, while analysts predict potential reduction of up to 2pc points. A recent survey by brokerage house shows more than two third of respondents expect a minimum two-percentage-point cut, with 29% anticipating a reduction between 50 and 150 basis points.
One third even predicted 2.5pc reduction, and a hand full of participants are looking for cut above than 2.5percent.
Since June 2024, State Bank lowered interest rates by cumulative total of 7percentage points across four consecutive meetings. With inflationary pressures easing, SBP decision is expected to support economic growth and further stabilize the financial landscape.
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