KARACHI – The State Bank of Pakistan (SBP) will hold its Monetary Policy Committee (MPC) meeting on March 10, with strong market speculation about a possible policy rate cut from the current 12%.

Investor optimism has driven a bullish trend in the stock market ahead of the decision. A survey by a Karachi-based brokerage house revealed divided expectations—while over one-third of participants foresee no change, nearly two-thirds anticipate a cut of at least 50 basis points (bps), bringing the rate down to 11.5%. Some predict a 100bps cut, while a few expect a 150bps reduction.

Experts suggest that the SBP has room for a 100bps cut, but the decision will depend on factors such as IMF’s review, new revenue targets, and upcoming taxation measures.

In January 2025, the SBP reduced the policy rate by 100bps, from 13% to 12%, as part of a broader 1,000bps reduction since June 2024, aimed at tackling economic challenges. Despite positive inflation trends, rising remittances, and export growth, core inflation remains a concern, which could influence the upcoming decision.