SBP expected to cut policy rate on Monday

The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) is scheduled to convene on Monday, June 10, to deliberate on the nation’s monetary policy. This crucial meeting will be closely watched by market participants and economic analysts.

Following the MPC meeting, the SBP is expected to release its monetary policy statement via a press release later the same day.

In the most recent MPC meeting held on April 29, the committee opted to maintain the interest rates at a historic high of 22 per cent, marking the seventh consecutive meeting where rates remained unchanged.

Speculation is rife among market analysts that the SBP may reduce its policy rate by 100 basis points (bps). If this anticipated reduction materialises, it would be the first rate cut in nearly four years, signalling a potential shift in the SBP’s approach after an extended period of stringent measures aimed at combating rampant inflation.

The MPC’s decision is set to precede the announcement of the federal budget for 2024-25, adding further significance to Monday’s meeting.

A potential rate cut could indicate a strategic move to stimulate economic growth and provide relief to businesses and consumers alike in the run-up to the new fiscal year.