KARACHI – The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) maintained the policy rate stable at 12 percent on Monday, in contrast to expectations of a 50-100BPs cut.
SBP keeps policy rate unchanged at 12pc.
According to reports, the Monetary Policy Committee held a meeting today to set the policy rate for the next one and a half months, deciding to maintain the interest rate at 12%.
The State Bank stated that inflation in February was 1.5%, and it is expected to decrease further before gradually rising again. For the current fiscal year, inflation is projected to remain between 5% to 7%, though risks persist due to fluctuations in food prices, energy adjustments, additional taxes, and global commodity prices.
For the fiscal year 2024-25, the current account balance is expected to show a surplus, and the GDP deficit will be around 0.5%. The State Bank’s reserves are projected to surpass $13 billion by June 2025. In a globally uncertain environment, strengthening external buffers is crucial, with economic growth expected to recover in the second half of FY25 as financial conditions improve.
The State Bank has maintained its forecast for economic growth at 2.5% to 3.5% for the current fiscal year, predicting an acceleration in economic activities going forward.
It is noteworthy that in the previous review, the policy rate was reduced by 1%, setting it at 12%.
