State Bank of Pakistan likely to give good news on the economic front

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State Bank of Pakistan likely to give good news on the economic front

KARACHI: State Bank of Pakistan likely to give good news on the economic front with a policy rate cut.

As the State Bank of Pakistan (SBP) is all set to announce its monetary policy later this week, almost all major brokerage houses and analysts have predicted that the current policy rate of 13.25pc will experience a cut.

Profit called 16 leading financial institutions and enquired about their stance regarding the upcoming monetary policy announcement. Fifteen responded while Al Habib Capital Markets reserved comments until the weekly Sensitive Price Index numbers are released.

Of the 15 that called, only two expect the policy rate to remain unchanged, while the remaining expect a policy cut. The mode is a 50bps cut. No house anticipates a rate hike.

The houses may change their stances if the Sensitive Price Index data released at the end of this week is different from their expectations.

The Monetary Policy Committee of the State Bank of Pakistan (SBP) will meet on Tuesday, March 17, 2020, to decide about the monetary policy.

The last rate hike was made in July 2019 to 13.25pc, following which the policy rate has remained unchanged. The cycle of monetary tightening was undertaken to control the rising inflation rate.

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