Bloomberg has reported that Pakistan is expected to cut interest rates by at least 100 basis points during the current fiscal year.
According to the report, average inflation is likely to remain around 6 percent this year, while the State Bank has room to reduce rates by up to 250 basis points. The current account deficit is projected to remain at 0.3 percent of GDP.
The report noted that, considering inflation, the output gap, and the current account deficit, a 100 basis-point cut is anticipated. In a previous survey, Bloomberg predicted that the policy rate could drop from 11 percent to 9 percent.
Meanwhile, JP Morgan has forecast a deeper cut of 300 basis points this year, with the policy rate potentially falling from 11 percent to 8 percent.
