Monetary Policy Committee to meet on November 25, says SBP

The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) will meet on Friday, November 25, 2022, at the SBP headquarters in Karachi.

In a short statement on Tuesday, the central bank said that following the meeting, SBP will issue the Monetary Policy Statement through a press release on the same day.

In its last meeting in October, the MPC had maintained the policy rate unchanged at 15%.

The MPC back then noted “the continued deceleration in economic activity as well as the decline in headline inflation and the current account deficit since the last meeting. It also noted that the recent floods have altered the macroeconomic outlook and a fuller assessment of their impact is underway”.

“The MPC was of the view that the existing monetary policy stance strikes an appropriate balance between managing inflation and maintaining growth in the wake of the floods,” the MPC was quoted as saying in the monetary policy statement.

The policy rate has been raised by a cumulative 800 basis points since September 2021.

Many believe the central bank to maintain a status quo in the upcoming announcement.

“We expect the SBP to keep the policy rate unchanged at 15% in the upcoming monetary policy,” said Arif Habib Limited (AHL) in a note. “To recall, in the last MPS too, policy rate was kept unchanged at 15% and this stance was taken in lieu of a continued deceleration in economic activity as well as a decline detected in headline inflation since the last meeting held in August.”

Monetary policy: market expects no change in key interest rate

As per the survey poll conducted by AHL regarding market expectations in the upcoming monetary policy, 84.2% of the total respondents, which include representatives from financial services and manufacturing, are of the view that there will be no change in the policy rate for upcoming MPS.

Meanwhile, 15.8% of respondents expect a rate hike.

Another poll conducted by Topline Securities also conveyed that a majority expects status quo in the upcoming monetary policy announcement.