Under its new monetary strategy, SBP may lower interest rates today.

The market is expecting a second straight interest rate drop when Governor SBP Jameel Ahmad makes his monetary policy announcement.

Experts in the market anticipate a 100–150 basis point reduction in the interest rate, which stands at 20.5% currently.

June 2024 had a $410 million current account deficit and an official inflation rate of 12.6%.

Recently, Securities Broking and Investment Banking organizations polled high net worth individuals and financial institutions, and the findings showed a strong expectation for a significant rate decrease.

While JP Morgan expected the EFF to raise foreign reserves, it also predicted a slight increase in the current account deficit and exclusion from the offshore bond market. Much like the new EFF, recent policy-based loans from the World Bank and ADB are regarded as a significant endorsement of Pakistan’s creditworthiness.

Previously, on June 10, the SBP reduced the interest rate to 20.5% by 150 basis points (bps).

Under a tight monetary policy stance supported by fiscal austerity, the SBP Monetary Policy Committee (MPC) observed that “underlying inflationary pressures are also subsiding.”

The MPC also noted that there were “some upside risks to the near-term inflation outlook associated with the upcoming budgetary measures and uncertainty regarding future energy price adjustments” at the same moment.