In positive development, State Bank of Pakistan likely to cut the monetary policy rate
KARACHI: In positive development, State Bank of Pakistan likely to cut the monetary policy rate.
The State Bank of Pakistan’s Monetary Policy Committee will meet on Tuesday (March 17) in Karachi to decide the country’s monetary policy.
The central bank is expected to issue the Monetary Policy Statement through a press release on the same day.
The announcement of the monetary policy decision comes at a time when increased concern regarding the Covid-19 coronavirus outbreak was adversely impacting the global economy.
The United States Federal Reserve recently cut the policy rate by half a percentage point, to a range of 1-1.25pc. This was the country’s first emergency rate cut since 2008.
The news has prompted speculation that the SBP may follow suit. Unrelated to the Covid-19’s potential economic impact, market analysts had previously believed that a cut in the policy rate would happen in 2020.
Earlier, a cut was predicted in mid-March, but due to January’s unusually high inflation rate of 14.56pc, a rate cut was expected later in the year, in July or even September.
The SBP has maintained that inflation will remain at 11-12pc for the financial year 2020-21.
In the last policy announcement on January 28, the SBP maintained the policy rate at 13.25 per cent for the next two months.
The SBP had last changed the policy rate on July 16, 2019, to 13.25pc with a rise of 100 basis points. At the time, it cited increased potential inflation owing to a rise in utility costs.
The central bank further kept the policy rate unchanged in its reviews on September 16 and November 2 last year.