How much of Policy Rate cut is expected in today's State Bank's MPC review?

 

No Policy Rate Cut Expected Today: SBP to Maintain Status Quo

Multan, Pakistan – The State Bank of Pakistan (SBP) is widely anticipated to maintain its key policy rate unchanged at 22% during its Monetary Policy Committee (MPC) review today. Despite a recent decline in inflation, market experts and analysts believe the central bank will adopt a cautious approach to monetary policy.

While inflation has shown signs of moderation from its peak, it still remains significantly elevated. The SBP is likely to prioritize bringing inflation down to its target range of 5-7% by September 2025. A premature easing of monetary policy could reignite inflationary pressures, undoing the hard-won gains made thus far.

Furthermore, the global economic outlook remains uncertain, with risks such as geopolitical tensions and the possibility of a recession posing challenges. Maintaining a tight monetary stance provides a buffer against potential external shocks.

While the business community and borrowers eagerly await a reduction in interest rates to stimulate economic activity, the SBP is expected to prioritize price stability and macroeconomic stability over short-term growth considerations.

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It is important to note that the SBP's decision will be influenced by various factors, including inflation trends, exchange rate stability, and external account developments. While today's decision is likely to maintain the status quo, future MPC meetings may offer opportunities for policy adjustments based on evolving economic conditions.

Disclaimer: This article is based on market expectations and analysis. The actual decision of the State Bank of Pakistan may differ.