SBP gears up for monetary policy meeting amid rate cut speculations

The State Bank of Pakistan (SBP) has scheduled a meeting of its Monetary Policy Committee (MPC) for Monday, March 18, 2024, to deliberate on the nation’s monetary policy, as announced by the central bank on Friday.

The SBP intends to release the Monetary Policy Statement on the same day, providing insights into its decision-making process.

Anticipation looms as a prominent brokerage house foresees a noteworthy chance of the SBP reducing the key policy rate by 100 basis points (bps).

Currently, the key policy rate stands at a historic high of 22 per cent.

Arif Habib Limited (AHL) outlined in its recent report the likelihood of the SBP initiating a 100-bps cut in the upcoming policy, potentially marking the commencement of an interest rate reversal cycle.

Despite Pakistan witnessing a decrease in headline inflation to 23.1 per cent year-on-year in February, as reported by the Pakistan Bureau of Statistics (PBS), down from 28.3 per cent in January, there are calls for cautious action.