SBP to Announce Monetary Policy: Expected Decrease in Interest Rates across Pakistan

Currently, the interest rate is at the highest level of 22 percent

Jun 10, 2024 - 14:20 Updated: Jun 10, 2024 - 14:45

SBP to Announce Monetary Policy: Expected Decrease in Interest Rates across Pakistan

Islamabad: The State Bank of Pakistan (SBP) is set to announce the monetary policy today, with expectations of a decrease in interest rates.

The Monetary Policy Committee (MPC) meeting will convene, followed by the SBP's announcement via a press release. Presently, the interest rate stands at its highest level of 22 percent.

The MPC, considering significant improvements in inflation and external positions due to macroeconomic stabilization measures, has decided to maintain the policy rate at 22%. Despite these advancements, inflation persists at high levels, and risks loom from geopolitical uncertainties, global commodity price fluctuations, and forthcoming budget measures. The MPC aims to curb inflation to 5-7% by September 2025.

Recent developments include a moderate economic recovery marked by a 6.8% growth in the agriculture sector and a current account surplus of $619 million in March 2024, propelled by remittances. Exports have shown steady growth, while imports have declined, stabilizing foreign exchange reserves. Fiscal consolidation efforts have bolstered the primary surplus to 1.8% of GDP, although interest payments have surged due to high debt.

Broad money growth surged to 17.1% in March 2024, driven by increased foreign assets and government borrowing, while private sector credit expansion slowed. Inflation moderated to 20.7% in March from 23.1% in February, attributed to stringent monetary and fiscal policies, reduced global commodity prices, and improved food supplies.