Economists said the stable exchange rate, increase in forex exchange reserves, declining CA deficit, lower inflation outlook and falling POL products' prices have created some cushion for the rate cut.
They are expecting some 50 to 100 basis points (bps) cut in key policy rate on positive economic indicators. The inflation for February has already declined to 12.4 percent, while inflation expectations for March are 10 percent. Pakistan's current account has witnessed massive improvement supported by a sharp decline in the goods import bill. The country's current account deficit plunged by 72 percent during the first seven months of this fiscal year (FY20) compared to the same period of last fiscal year.