The Monetary Policy Committee (MPC) of the State Bank of Pakistan is set to present monetary policy on Thursday (today).
There is all likelihood that the central bank will cut policy rate by 150 basis points (bps) as a significant slowdown in inflation gives policymakers space to continue monetary easing in a bid to spur growth.
It would be the third rate cut since June 2024.
At present, the interest rate is at 19.50 percent.
It may be recalled that the finance ministry claimed that annual inflation rate had fallen to 9.6% in August from 11.1% the previous month. The inflation rate in August 2024 has come to the lowest level in 34 months, it added.
According to analysts, the central bank will slash policy rates by 150bps to 18%. They also expect that the MPC will take the policy rate to 16% or lower by the end of December 2024.
In the last meeting held on July 29, the MPC slashed interest rates by 100bps to 19.5%. So far, the MPC has cut the interest rate by 250 bps – from 22% to present 19.5%.
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