After much delay, the State Bank of Pakistan (SBP) has issued the advance calendar of Monetary Policy Committee (MPC) meetings for the period between July and December 2024.
The central bank is due to hold four meetings during the six-month period, according to the schedule.
The first MPC meeting will be held on July 29 (Monday), 2024 while the second will be held on September 12 (Thursday), 2024.
The third meeting is scheduled to be held on November 04 (Monday), 2024 while the fourth is expected to take place on December 16 (Monday), 2024.
In its last MPC held on June 10, the central bank reduced the key policy rate by 150 bps, taking it to 20.5%. This was the first cut in the key policy rate in four years.
Arif Habib Limited (AHL), a brokerage house, on Monday said that the SBP is expected to further ease its monetary policy in its upcoming meeting, amid a downward trajectory of the pace of inflation and improved economic indicators.
“We’re expecting a 100bps cut that could lower the policy rate to 19.5%, a level not seen since March 2023,” AHL said in its report.
Earlier, BMI, a Fitch Solutions Company, in its ‘Pakistan Country Risk Report’ published on July 15 expected that the SBP will cut the key policy rate at its next MPC meeting.
The SBP is expected to cut its key policy rate to 16% by the end of this calendar year i.e. 2024, and lower it further to 14% by end of 2025, projected BMI in its report.
What does the MPC do?
The MPC is responsible and fully empowered to decide the monetary policy stance.
Section 9E of the SBP Act 1956 lays out the powers and functions of the Monetary Policy Committee that have been mainly identified to formulate monetary policy, including, as appropriate, decisions relating to intermediate monetary objectives, key interest rates and the supply of reserves in Pakistan and may make regulations for their implementation.
Moreover, the MPC also approves and issues the monetary policy statement and other monetary policy measures. It also performs any other functions conferred on it by law and carries out any ancillary activities incidental to the exercise of its functions under this Act.