The State Bank of Pakistan (SBP) is expected to maintain its key interest rate at 22 per cent for the current month, as indicated by a recent survey conducted by brokerage Topline Securities. The survey, which involved insights from analysts and financial market participants, revealed that 70 percent of respondents anticipate no change in the policy rate. They attribute this expected stability to factors such as reduced inflation due to lower fuel prices and a stronger Pakistani rupee.
To combat inflationary pressures and enhance the external balance, the SBP has raised its policy rate by a total of 1,500 basis points since October 2021. However, the rate has remained at 22 percent since July 2023.
Analysts from Topline Securities speculate that the central bank is likely to maintain this rate until at least March 2024, signaling a pause in its tightening measures.
Since the last meeting of the Monetary Policy Committee (MPC) on September 14, there have been several positive developments. Notably, Pakistan's current account deficit has significantly decreased, dropping from $164 million in August to just $8 million in September.