The State Bank of Pakistan’s (SBP) Monetary Policy Committee (MPC) is scheduled to meet on January 27 to review the country’s monetary policy, the central bank announced on Monday. Following the meeting, SBP Governor Jameel Ahmad will hold a press conference to disclose the committee’s decision.
In its last meeting, the MPC reduced the policy rate by 200 basis points (bps) to 13%, reflecting a decline in the inflation rate and buoyant trading activity in the stock market.
Earlier this month, the SBP revealed that it would announce its monetary policy four times during the first half of the year. The upcoming policy review is part of a series of meetings, with additional sessions planned for March 10, May 5, and June 16.
Analysts from a leading brokerage firm have speculated that the central bank could implement a further 100 bps cut in the upcoming meeting. Intermarket Securities, in a statement, noted that a smaller rate reduction might be seen as a negative signal by investors, potentially impacting market sentiment.
Data from the Pakistan Bureau of Statistics indicates that the country’s headline inflation rate decreased to 4.1% year-on-year in December 2024, down from 4.9% in November 2024. This decline in inflation has contributed to expectations of a potential rate cut.
The SBP’s decision comes amid ongoing economic challenges, as Pakistan continues its efforts toward economic recovery, supported by a $7 billion financial assistance package from the International Monetary Fund (IMF) secured in September 2024.
