The State Bank of Pakistan (SBP) is expected to maintain its key interestrate at 22 per cent for the current month, as indicated by a recent surveyconducted by brokerage Topline Securities. The survey, which involvedinsights from analysts and financial market participants, revealed that 70percent of respondents anticipate no change in the policy rate. Theyattribute this expected stability to factors such as reduced inflation dueto lower fuel prices and a stronger Pakistani rupee.
To combat inflationary pressures and enhance the external balance, the SBPhas raised its policy rate by a total of 1,500 basis points since October2021. However, the rate has remained at 22 percent since July 2023.
Analysts from Topline Securities speculate that the central bank is likelyto maintain this rate until at least March 2024, signaling a pause in itstightening measures.
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Since the last meeting of the Monetary Policy Committee (MPC) on September14, there have been several positive developments. Notably, Pakistan’scurrent account deficit has significantly decreased, dropping from $164million in August to just $8 million in September.