MPS on 12th: Analysts say policy rate to remain unchanged

KARACHI: The State Bank of Pakistan (SBP) is scheduled to announce monetary policy statement on December 12, 2023.

The meeting of the Monetary Policy Committee (MPC) of the SBP will be held next Tuesday to review the economic indicators and decide about the key policy rate.

In the previous meeting held on Oct 30, 2023, the committee decided to continue the tight monetary stance and kept the policy rate unchanged at 22 percent. However, the committee had noted that volatility in global oil prices, conflict in the Middle East and surge in gas tariffs may pose some risks to inflation and current account outlook.

For the next monetary policy meeting, most analysts are expecting status quo as the inflation is still higher due to the recent hike in the gas tariff. Inflation surged by 30 percent YoY in Nov’23, largely due to an increase in gas prices.

“We expect SBP to keep the policy rate unchanged at 22 and one of the key drivers influencing the decision is inflation,” analysts said.

The increase in inflation during Nov’23 has faded the chances of early cut in policy rate, ie, in Dec’23, therefore, it is being expected that once the inflation eases the SBP would consider easing monetary policy most probably Mar’24 onward, they added.

Copyright Business Recorder, 2023