IslamabadThe State Bank in Pakistan (SBP) is scheduled to hold the MPC Monetary Policy Committee meeting on March 10, 2025.
In a poll by Topline Securities, market participants are from a different point of view, where 38 % believe that prices will remain unchanged. While 62 % expect a rate of 50 -bit per second.
From this 62 %, 37 % is expected to reduce the rate of 100 bits per second, and 20 % expect a rate of 50 -bit per second, and 5 % expect a rate of 150 -bit per second.
From our point of view, the average area of additional additions for about 100 bits per second is that we expect the inflation rate in the fiscal year 26 to 8 to 9 %, which translates to a real rate ranging from 300 to 400 points per second with the current policy rate of 12 %. Historically, we have maintained a real rate ranging from 200 to 300 points per second.
However, we believe that the Central Bank of Representatives Committee will monitor the status quo at the next meeting, which has the next reason;
The International Monetary Fund is scheduled to review for the first week of March, as the goals of new revenues and new budget tax measures will receive more attention, in our opinion. This may affect the FY26 inflation expectations.
Import numbers higher than the past two months (December and January 5.2 billion USD) along with PKR decreased by 1.6 % since November 2024 in a curbing market The additional interest rate may stop on a wise basis to continue the previous mitigation analysis.
The real effective exchange rate (RER) reached 104.05 in January 2025, which indicates a relatively exaggerated state of PKR compared to other trading peers/regionalists.
We maintain the goal of our interest rate of 11 % for the month of December 2025.
6M KIBor and 6 months rises from 21 to 24 basis points from the last MPC meeting:* Secondary market indicators also show that the interest rate reduction cycle is likely to be abroad 6 months after Kibor and TBIL have increased by 21-24 points per second since the last MPC meeting with a rate/return by 11.85 %/11.73 %.
95 % believe that the central bank has an additional area of 0-200-bit per second in reducing the interest rate by June 2025*
Topline Research conducted a poll of the main market participants on expectations about the price of policy, and the average inflation for the fiscal year 25.
In the question with the goal of the interest rate in June 2025, 95 % of the participants believe that the interest rate will remain in the range of 10-12 %, indicating more reduction of 0-200 bits per second in the next 4 months (or in the next three meetings).
On the side of inflation, 65 % of the respondents believe that the average fiscal year 25 will be 6-8 % and 22 % expected average inflation less than 6 %. We keep our inflation goal from 6-7 % for the fiscal year 25. During the 26th fiscal year, we expect inflation to reach about 8-9 %.
The Central Bank also reviewed its forecast for inflation for the fiscal year 25 at the last representative meeting in the range of 5-7 %.
On the side of the currency, 55 % of the participants believe that PKR/USD will cross 282 rupees by June 2025, while 45 % believe that the exchange rate will be less than 282.
