State Bank’s MPC Review on March 10: Policy Rate Expectations

KARACHI – All Eyes are on State Bank’s Monetary Policy Committee MPC Meeting as central bank is expected to cut the policy rate on Monday March 10.

State Bank of Pakistan convened MPC huddle on Monday with growing market expectations of a further reduction in the policy rate, which currently stands at 12pc.

A survey conducted by a brokerage house said a rate cut of at least 100 basis points is expected, bringing the rate down to 11 or 11.5pc. Some even predict more aggressive reduction of 150 basis points, while others see no change ahead of the IMF review.

MPC members have room for a 100 basis point reduction; however, the decision could be influenced by upcoming events. This review is expected to focus on Pakistan’s fiscal policies, including new revenue targets and potential tax measures, which may prompt officials to err on the side of caution and maintain the current rate.

The policy rate was last reduced in January 2025, when the State Bank lowered it by 100 basis points, from 13% to 12%.

‘Interest Rate Should Drop to 6%’

Business leaders push for 6pc reduction in interest rate to boost economic growth as they urge government to lower the rate for the next five years, introduce an amnesty scheme for the construction industry, and offer loan incentives for Small and Medium-sized Enterprises (SMEs).

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With inflation at a nine-year low, leaders argue that a significant rate cut is justified to stimulate business expansion, exports, and job creation.