{"id":2494,"date":"2025-01-10T06:08:04","date_gmt":"2025-01-10T06:08:04","guid":{"rendered":"https:\/\/pkfin.kotenterprises.dev\/?p=2494"},"modified":"2025-01-10T06:08:04","modified_gmt":"2025-01-10T06:08:04","slug":"sbp-likely-to-cut-key-interest-rate-6th-consecutive-time-this-month","status":"publish","type":"post","link":"https:\/\/pkfin.kotenterprises.dev\/?p=2494","title":{"rendered":"SBP Likely to Cut Key Interest Rate 6th Consecutive Time This Month"},"content":{"rendered":"

Karachi, January 2025<\/strong> \u2013 The State Bank of Pakistan (SBP)<\/a> is expected to announce a 100 basis points (bps) cut in the monetary policy rate during its upcoming meeting, following five consecutive reductions in 2024. The anticipated adjustment would bring the policy rate down to 12%, as per a report by Arif Habib Limited<\/a>.<\/p>\n

The move comes amid a significant decline in inflation, which is forecasted to hit 3.06% in January 2025 \u2014 the lowest level in nearly nine years. This marks a sharp drop from 4.1% year-on-year (YoY) inflation recorded in December 2024, an 80-month low. By comparison, inflation during the same period last year stood at a staggering 29.7%.<\/p>\n

Inflation Trends and Outlook<\/h2>\n

Inflation is projected to remain below 5% until April 2025, driven by a favorable base effect. However, experts predict a reversal starting May 2025, with inflation expected to rise to 8.81% in May and 8.97% in June. This upward trend will likely emerge as the base effect dissipates after the first quarter of 2025.<\/p>\n

The sharp decline in inflation has been attributed to multiple factors, including the high base effect and a relatively stable Pakistani Rupee (PKR).<\/p>\n

Economic Indicators Bolster Rate Cut Expectations<\/h2>\n

Several economic indicators support the likelihood of a rate cut:<\/p>\n