KARACHI: The Monetary Policy Committee (MPC) of the SBP will meet on Thursday (tomorrow) at SBP Karachi to decide about the Monetary Policy. Later on, the SBP will issue the Monetary Policy Statement through a press release on the same day.

In the previous monetary policy meeting held on July 31, the Committee kept the policy rate unchanged at 22 percent as the meeting noted that the economic uncertainty has decreased, whereas near-term external sector challenges have been largely addressed and investor confidence has shown improvement.

However, now the majority of analysts and economists are expecting further monetary tightening and an increase of up to 100-200 basis points increase in the key policy rate on rising inflationary pressure.

According to Topline, owing to the sharp spike in commodity prices, concerns over inflation, and the current account outlook, the cut-off yields in the recent T-Bill auction have increased by 162-213 bps, with cut-off yields now standing at 24.5 percent, 24.8 percent, and 25.1 percent for 3, 6, and 12 months, respectively.

Furthermore, secondary market yields on T-Bill and PIBs have increased since July 31, 2023. Therefore, there are expectations of further surge in the policy rate to address the economic risks.

Copyright Business Recorder, 2023