SBP to make policy announcement amid economic slowdown State Bank of Pakistan

SBP to make policy announcement amid economic slowdown

KARACHI: State Bank of Pakistan (SBP) is scheduled to announce monetary policy on November 25, 2022 amid slowdown in the economy.

SBP’s monetary policy committee is set to meet on November 25, 2022 to decide benchmark rate. As per the survey conducted by Insight Securities, majority (93 per cent) participants expect policy rate to remain unchanged, while 7 per cent respondents expect increase in policy rate.

READ MORE: State Bank reviews benchmark policy rate on November 25

“We also expect SBP to maintain policy rate at 15 per cent, amid slowdown in domestic economic activity as evident in high frequency indicators, where we have witnessed a decline of 26 per cent, 18 per cent, 23 per cent and 46 per cent in diesel, petrol, cement and automobiles sales, respectively during first four months (July – October) of fiscal year 2022-2023,” said Muhammad Shahroz at Insight Securities.

READ MORE: Poll suggests SBP to keep benchmark policy rate unchanged at 15pc

Current account deficit for October 2022 clocked in at $567 million depicting decline of 68 per cent YoY, thanks to 23 per cent decline in trade deficit.

Imports have remained under control in the first four months of the current fiscal year and stood at $20.6 billion as against $23.3 billion, down by 12 per cent YoY.

READ MORE: SBP keeps policy rate unchanged at 15% amid economic deceleration

The reduction is attributable to administrative measures taken by the government and central bank coupled with slowing domestic demand.

Decline in commodity prices will keep imports under control, however, recent slowdown in export and remittances will put some pressure on current account deficit.

READ MORE: SBP keeps benchmark rate unchanged at 15% amid rising inflation

In October, inflation clocked in at 26.5 per cent amid higher electricity tariff and higher food prices.

“We opine that, inflation has peaked and will decline from here amid lower fuel cost adjustment and high base effect,” Shahroz added.

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