KARACHI – The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) is all set to hold a meeting today, November 4, to decide about the policy rate for next two months.
Reports claimed that policy rate is expected to drop by 200 basis points amid declined in inflation and shrinking current account deficit.
The inflation has dropped to to the lowest in three and half years. Ahead of the review, financial experts has predicted a decrease of 200 basis points in the interest rate, which could bring the policy rate down to 15.5 per cent. They said decreasing inflation rate will have an impact on the decision.
As most of the traders and industrialists eye 200bps cut, some are speculating bigger reduction despite that more cut could exert pressure on rupee and impact foreign investment, especially in other emerging markets.
By end of this fiscal year, the total interest rate reduction is expected to be around 650 basis points as policy rate could fall to around 13pc.
