KARACHI: The State Bank of Pakistan (SBP) will hold a meeting on March 10 to announce its monetary policy for the next two months. The decision will be shared through a press release, according to an SBP spokesperson. A survey of brokerage firms suggests that 70% of respondents expect an interest rate cut between 0.5% and 1%.
The meeting will be held in Karachi, led by the SBP Governor. Currently, the base interest rate is 12%, while the Karachi Interbank Offered Rate (KIBOR) is between 11% and 11.5%. Inflation has dropped to a 9.5-year low of 1.5%.
The SBP’s Monetary Policy Committee (MPC) meets regularly to set interest rates and financial policies. Its goal is to control inflation and support economic growth. The March 10 meeting is part of the scheduled plan, with future meetings planned for May 5 and June 16.
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Pakistan’s economy has improved in recent months. Inflation peaked at 40% in May 2023 but fell to 1.5% by February 2025 after policy changes. This decrease has helped people by lowering the prices of goods and services. The SBP began cutting interest rates in June 2024 when the rate was 22%. Since then, it has been reduced by 10%, with the last cut in January 2025 bringing it to 12%.
Reports indicate that the SBP is continuing to lower interest rates to improve the economy. In January 2025, the bank cut the rate by 1% (100 basis points) as inflation fell to 4.1% in December 2024. Experts believe further rate cuts are possible as inflation remains low and the economy needs support. The government aims to increase foreign exchange reserves to $13 billion by June 2025, which depends on better trade and investment.
According to the brokerage firms’ survey, experts expect a rate cut of 0.5% to 1%. They believe lower rates will help businesses borrow more easily, allowing them to expand, especially with low inflation. However, some experts have warned that prices for certain non-food and non-energy items are still high, so the SBP may act cautiously.
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