Most analysts expect policy rate cut amid low inflation

The financial market is abuzz with speculation as the State Bank prepares to announce its monetary policy by the end of this month, with researchers, analysts and bankers widely anticipating a rate cut, though opinions vary on the extent of the reduction. Given June’s inflation rate of 12.6 per cent, significantly lower than the prevailing interest rate of 20.5pc, the market expects a substantial cut. However, a survey conducted by the brokerage house Arif Habib Limited (AHL) reveals differing expectations among stakeholders, with most expecting a cut of 100 basis points (bps). “Our poll suggests that 55.7pc of respondents expect the SBP to reduce the policy rate, while 44.3pc anticipate the policy rate to remain unchanged,” AHL said.