Brokerage Firms Predict No Change in Policy Rate in Upcoming MPC Meeting
The State Bank of Pakistan (SBP) is set to announce its monetary policy on June 16, 2025. Brokerage firm Top line Securities expects that there will be no change in the policy rate.
In a recent poll conducted by Top line Securities, 56% of market participants believe the SBP will keep the policy rate unchanged. This is an increase from 31% in the previous poll. However, 44% of participants expect a rate cut of at least 50 basis points.
Out of the 44% anticipating a rate cut, 19% expect a reduction of 50 basis points, while 25% are hoping for a larger 100 basis point cut.
In the last Monetary Policy Committee (MPC) meeting on May 5, 2025, 8 out of 9 members voted for a 100 basis point cut.
KIBOR and T-Bills Lowered After Last MPC Decision
Following the 100 basis point cut in the previous MPC meeting, the yields for KIBOR and T-bills have fallen by 88-99 basis points. Currently, the 6-month KIBOR is at 11.09%, while the 6-month T-bills are at 10.95%.
Market Expectations for Interest Rates and Inflation
Topline Securities also conducted a survey to gauge market expectations for the policy rate and inflation in the upcoming year.
Regarding the interest rate target for December 2025, 42% of respondents believe the rate will stay between 8-10%. This is a slight increase from 37% in the last poll. However, 58% of participants think the interest rate will remain above 10% by December 2025, a decrease from 63% in the previous survey.
Top line Securities predicts that the interest rate will drop and stabilize at 10% by December 2025.
Inflation Expectations for FY26
On inflation, 69% of the respondents expect it to remain in the range of 6-8% for fiscal year 2026 (FY26). Meanwhile, 20% anticipate inflation between 8-10%, and 11% expect it to be below 6%.
Top line Securities expects inflation to average between 6-7% for FY26. The government has set an inflation target of 7.5% for FY26, while the International Monetary Fund (IMF) forecasts an average inflation rate of 7.7% for the same period.
