KARACHI: The State Bank of Pakistan (SBP) will hold its next monetary policy meeting on March 18, 2024, amid growing expectations of a rate cut as inflation eased to a 20-month low in February.
The SBP’s Monetary Policy Committee (MPC) has kept the policy rate unchanged at 22 percent since July 2023, citing high inflationary pressures on the economy. However, the latest data showed that the Consumer Price Index (CPI), the main measure of inflation, slowed to 23.1 percent year-on-year in February, the lowest level since June 2022.
Market participants have strengthened their hopes for a rate cut soon, as the lower inflation figures suggest that the SBP has room to ease its monetary stance and support the economic recovery.
This became further evident after the secondary market yields witnessed a significant drop in the previous session, with the benchmark 6-month Karachi Interbank Bid and Offer rates (KIBOR) dropping by 10 basis points (bps) to 21.34 percent and 21.59 percent, respectively.
The SBP has released the advance calendar of MPC meetings to make the process of monetary policy formulation predictable and transparent. The schedule shows the central bank planned to hold four meetings in the second half of the ongoing fiscal year (2HFY24). One was held on January 29, 2024, the next is scheduled for March 18, 2024, and the remaining two are set for April 29 and June 10, 2024, respectively.
