A representational image of the State Bank of Pakistan building. — AFP/File
A representational image of the State Bank of Pakistan building. — AFP/File

The State Bank of Pakistan’s (SBP) Monetary Policy Committee (MPC) will meet on Monday (October 30) to decide on the interest rate regime.

Taking to X — formerly known as Twitter — the central bank said: “The Monetary Policy Committee of #SBP will meet on Monday, October 30, 2023 to decide about the Monetary Policy. SBP will issue the Monetary Policy Statement through a press release on same day.”

Financial pundits believe that the SBP is likely to its key interest rate unchanged at 22% as inflation is seen easing further due to lower fuel prices and a stronger rupee, according to a report published in The News.

The central bank has raised its policy rate by a cumulative 1,500 basis points since October 2021 to curb soaring inflation and support the external balance. The rate has been on hold since July 2023.

Analysts and financial market participants surveyed by brokerage Topline Securities expected there would be no change in the benchmark rate at the upcoming policy review meeting, scheduled for Monday.

“70% of participants expect the policy rate to remain unchanged at 22%. While 16% of participants expect policy rate to down by 25-100 bps and 11% of participants expect it to down by more than 100 bps,” Topline Securities said last week, citing its poll.

“We also believe the SBP will keep the policy rate unchanged at 22 percent in the upcoming meeting.” However, many analysts foresee the SBP is done hiking rates and will stay on hold until at least March 2024.

There have been new developments since the last meeting of the MPC of the SBP held on September 14. These will probably be discussed by the MPC in the upcoming meeting.

In addition to this, the stabilisation measures have started yielding results. Inflation has come down to 31.4% in September 2023 after peaking at 38% in May 2023 and is expected to continue its downward trajectory over the coming months, whereas the external account has improved considerably and foreign exchange buffers are being built up.

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