KARACHI: The State Bank of Pakistan (SBP) is scheduled to hold its Monetary Policy Committee (MPC) meeting on Mar 10, 2025 to review the monetary policy stance.
In a poll conducted by Topline Securities, 38 percent of the market participants are of the view that rates will remain unchanged, while other 62 percent expect a rate cut of at least 50bps. However, analysts at Topline believed, State Bank’s Monetary Policy Committee (MPS) will observe status quo in upcoming meeting.
According to Topline, central bank has the further room of around 100bps cut as expected FY26 inflation to average between 8-9 percent, translating into real rate of 300-400bps with current policy rate of 12 percent. Historically Pakistan has maintained real rate of 200-300bps.
They said that there are multiple reasons of status quo as IMF review is scheduled for first week of March wherein new revenue targets and new budgetary taxation measures will get more attention and this may affect inflation outlook for FY26.
In addition, higher import numbers of last 2 months (Dec and Jan Average $5.2bn) along with PKR depreciation of 1.6 percent since Nov 2024 in Kerb market may pause the further interest rate easing on prudent basis to further analyse the impact of previous easing.
KARACHI: The State Bank of Pakistan (SBP) is scheduled to hold its Monetary Policy Committee (MPC) meeting on Mar 10, 2025 to review the monetary policy stance.
In a poll conducted by Topline Securities, 38 percent of the market participants are of the view that rates will remain unchanged, while other 62 percent expect a rate cut of at least 50bps. However, analysts at Topline believed, State Bank’s Monetary Policy Committee (MPS) will observe status quo in upcoming meeting.
According to Topline, central bank has the further room of around 100bps cut as expected FY26 inflation to average between 8-9 percent, translating into real rate of 300-400bps with current policy rate of 12 percent. Historically Pakistan has maintained real rate of 200-300bps.
They said that there are multiple reasons of status quo as IMF review is scheduled for first week of March wherein new revenue targets and new budgetary taxation measures will get more attention and this may affect inflation outlook for FY26.
In addition, higher import numbers of last 2 months (Dec and Jan Average $5.2bn) along with PKR depreciation of 1.6 percent since Nov 2024 in Kerb market may pause the further interest rate easing on prudent basis to further analyse the impact of previous easing.
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