Karachi, January 10, 2025 – The State Bank of Pakistan (SBP) has officially announced that the first meeting of the Monetary Policy Committee (MPC) for the year 2025 will take place on January 27.
This meeting will mark the beginning of the SBP’s quarterly monetary policy reviews for the year, as part of its ongoing efforts to monitor and adjust the country’s monetary stance in line with economic conditions.
In addition to the first meeting, the SBP released its advance calendar for the MPC meetings scheduled between January and June 2025. According to this schedule, four MPC meetings are planned over the six-month period. After the initial meeting on January 27 (Monday), the second MPC meeting will be held on March 10 (Monday), 2025. The third meeting will take place on May 5 (Monday), 2025, followed by the fourth and final MPC meeting of the first half of the year on June 16 (Monday), 2025.
The SBP’s previous MPC meeting, held on December 16, 2024, saw a significant reduction in the key policy rate, with the central bank cutting the rate by 200 basis points to 13%. This marked the fifth consecutive rate cut since June 2024, when the rate stood at 22%. The series of rate reductions has been part of the SBP’s efforts to stimulate economic activity amid challenging economic conditions.
Market analysts are forecasting further cuts to the policy rate, citing the decline in CPI-based inflation, which stood at 4.1% in December 2024. Experts from Arif Habib Limited (AHL) predict that the SBP may reduce the policy rate by 100 basis points in the upcoming January 2025 meeting, bringing the rate down to 12%.
The MPC plays a crucial role in shaping Pakistan’s monetary policy and is fully empowered to make decisions regarding interest rates and reserve management. According to Section 9E of the SBP Act 1956, the MPC is tasked with formulating monetary policy, setting key interest rates, and managing the supply of reserves in the economy. The committee is also responsible for approving and issuing the monetary policy statement, as well as implementing any measures deemed necessary to achieve its objectives.
In summary, the SBP’s MPC meetings will continue to play a pivotal role in shaping the country’s economic direction, as the central bank adapts its policies to address prevailing economic conditions and inflation trends.