Pakistan’s Central Bank Gears Up for Key Monetary Policy Meeting on Monday

The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) is all set to make a critical decision regarding the country’s monetary policy. The central bank is scheduled to hold a meeting on Monday, and on the same day, they will release the Monetary Policy Statement.

At the last MPC meeting on September 14, the policy rate was kept at a high 22 percent. The decision was influenced by the decreasing inflation rate, which had dropped from its peak of 38 percent in May to 27.4 percent in August 2023.

Market experts are speculating about the outcome of the upcoming meeting. A survey conducted by Topline Securities reveals that a significant 70 percent of participants expect the policy rate to remain unchanged at 22 percent. Only 16 percent anticipate a reduction of 25-100 basis points (bps), and 11 percent foresee a more substantial reduction of over 100 bps. A mere 3 percent predict an increase of over 100 bps, while no one expects an increase between 25-100 bps.

This upcoming decision is pivotal for Pakistan’s economy. A decision to keep rates steady will indicate a continued focus on inflation control, while a rate cut may be seen as an attempt to stimulate economic growth. It remains to be seen how the SBP’s MPC will balance these factors in its monetary policy decision.

Leave a Comment