The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) will meet on Monday, January 27, 2025 to decide about the Monetary Policy.
According to a press release, Governor SBP, Mr. Jameel Ahmad will announce the Monetary Policy decision at a press conference on the same day after the MPC meeting.
Market analysts widely anticipate another rate cut in the policy rate, citing easing inflationary pressures. Pakistan’s headline inflation, as measured by the Consumer Price Index (CPI), dropped to 4.1% year-on-year in December 2024, down from 4.9% in November and significantly lower than the 29.7% recorded in December 2023.
The SBP has already slashed a cumulative 900 basis points (bps) in the policy rate over the past five MPC meetings.
In its last policy announcement on December 16, 2024, the MPC cut the rate by 200 bps, bringing it down to 13%.
Shahi Ali Habib, CEO of Arif Habib Limited, expressed optimism about the upcoming policy decision. In a post on X, he stated, “Given the current economic conditions, we anticipate a 100 bps rate cut in the upcoming monetary policy meeting of January 2025. This would bring the policy rate down to 12%.”
Habib highlighted Pakistan’s improving inflation scenario, noting that headline inflation is projected to decline to 3.06% in January 2025—marking a nine-year low.
This declining inflationary trend is expected to create room for further monetary easing without risking fiscal or external instability.
