High hopes for a major cut as MPC meets tomorrow

The State Bank’s Monetary Policy Committee (MPC) will convene tomorrow (Thursday) to decide on the country’s monetary policy, including the key interest rate, amid demands for a major rate cut. The committee “will meet on Thursday, Sept 12, 2024, to decide about the monetary policy. Later on, the SBP will issue the Monetary Policy Statement through a press release on the same day”, the central bank said in a statement on Tuesday. The interest rate decision is being keenly watched by economic stakeholders, with expectations ranging from cautious optimism to demands for significant reductions. While many financial experts predict a modest cut, stakeholders in trade and industry are calling for a much larger reduction to stimulate growth. Currently, the interest rate stands at 19.5 per cent, while inflation in August was recorded at 9.6pc, resulting in a positive real interest rate of 10pc. This significant gap has led to calls for a substantial rate cut.