The State Bank of Pakistan (SBP) plans to announce the SBP monetary Policy, which will represent the economic outlook in the next 1.5 months, on July 30. The interest rate decision is the most awaited, which has high probabilities about the possibility of a rate cut.
Reduction of the policy rate by SBP is more likely due to recent T-bills auctions with lower yields. But the extent of the anticipated reduction is not clear.
According to a survey by Arif Habib Securities:
- 21.1% expect no change in the interest rate
- 31.6% predict a 100 basis points (1%) cut
- 47.4% expect a 50 basis points (0.5%) cut
Another survey by Topline Securities shows:
- 56% expect a cut between 50 to 100 basis points
- 37% see no change
- 2% predict a 200 basis points cut
The current interest rate is 11%. The last SBP Monetary Policy update on May 5 included a 1% rate cut.
Economists cite lower inflation, a current account surplus, and weak GDP growth as reasons for a rate cut. However, rising imports and pressure on the Pakistani rupee are concerns.
Business groups are demanding a further rate cut of 5–6%. President of Karachi Chamber of Commerce and Industry (KCCI), Javed Balwani, stated that Pakistan’s competitors have lower interest rates—Vietnam at 6.3%, Cambodia at 3%, Indonesia at 6%, and Bangladesh at 5.5%. He urged SBP to bring the rate to 6–7% to remain competitive in global markets.
 plans to announce the SBP monetary Policy, which will represent the economic outlook in the next 1.5 months, on July 30. The interest rate decision is the most awaited, which has high probabilities about the possibility of a rate cut.){kind=link}