State Bank of Pakistan (SBP) will announce monetary policy on Monday (today) and interest rates will likely decrease.
The meeting of the Monetary Policy Committee of the State Bank will be held today. After this, the central bank will announce the monetary policy through a press release. Currently, the interest rate is at the highest level of 22 percent.
The Monetary Policy Committee (MPC) of the State Bank of Pakistan decided to keep the policy rate at 22%, citing significant improvements in inflation and external positions due to macroeconomic stabilization measures. Despite these gains, inflation remains high and geopolitical uncertainties, global commodity price fluctuations, and upcoming budget measures pose risks to the inflation outlook. The MPC aims to reduce inflation to 5-7% by September 2025.
Since the last meeting, key developments include a moderate economic recovery with a 6.8% growth in the agriculture sector and a current account surplus of $619 million in March 2024, driven by remittances. Exports grew steadily while imports declined, stabilizing foreign exchange reserves. Fiscal consolidation improved the primary surplus to 1.8% of GDP, although interest payments increased due to high debt.
Broad money growth reached 17.1% in March 2024, driven by higher foreign assets and government borrowing, while private sector credit slowed. Inflation moderated to 20.7% in March from 23.1% in February, helped by tight monetary and fiscal policies, lower global commodity prices, and improved food supplies. The MPC stressed maintaining the current policy stance to ensure continued inflation reduction.
