ISLAMABAD – Anticipation of further interest rate cuts in Pakistan is touted to stimulate growth by making borrowing cheaper for businesses and consumers, as monetary policy review is due in second half of the first month.
State Bank of Pakistan (SBP) announced that it will reveal its monetary policy four times during the first half of 2025, with first review scheduled for January 27. Officials will review key micro and macroeconomic indicators during this meeting, followed by other sessions on March 10, May 5, and June 16.
Experts are looking at potential cut of up to to 200BPS in upcoming review after recent drop in inflation to 4.1pc in December last year. Amid the different claims, market insiders claimed the policy rate will fall into single digits by end of this fiscal year.
Lately, State Bank Chief confirmed the SBP will implement a gradual, phased approach to lowering interest rates.
Several chambers and firms called for cut in the policy rate to single digits, arguing that the current double-digit rate is unjustifiable given the significant decline in inflation.
On the other hand, Prime Minister Shehbaz Sharif also expressed optimism, noting that inflation had dropped to 4.1pc, foreign remittances had increased by 34pc, exports had risen, and foreign exchange reserves had surged from $4 billion to $12.5 billion.
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