State Bank of Pakistan Announces MPC Meetings Schedule

PTBP Web Desk

The State Bank of Pakistan (SBP) has laid out its strategic schedule for the Monetary Policy Committee (MPC) meetings for the first half of 2025, aiming to maintain economic stability through informed monetary policies. This planning comes at a time when the country is witnessing a significant reduction in inflation rates, prompting expectations of further policy rate adjustments.

2025 MPC Meeting Schedule

The SBP has scheduled four MPC meetings between January and June 2025:

January 27, 2025 (Monday) – The first meeting of the year, setting the tone for monetary policy adjustments.
March 10, 2025 (Monday) – A critical point to review early-year economic performance.
May 05, 2025 (Monday) – Mid-year review to adjust policies based on half-year economic data.
June 16, 2025 (Monday) – The final meeting before the fiscal year’s midpoint, to fine-tune the policy for the remaining months.

This schedule ensures a regular assessment of the economic landscape, allowing for timely interventions in monetary policy.

Recent Monetary Policy Actions

In the last MPC meeting held on December 16, 2024, the SBP made a significant move by reducing the key policy rate by 200 basis points, bringing it down to 13%. This was the fifth consecutive rate cut since June 2024, when the rate was at a high of 22%. This decision reflects the central bank’s response to the declining inflation, which was reported at 4.1% for December, signaling a cooling economy.

Market Expectations and Analyst Insights

Market experts are optimistic about further reductions in the policy rate. Arif Habib Limited (AHL) has forecasted a 100 basis points cut in the upcoming January meeting, suggesting the policy rate could decrease to 12%. This prediction is based on the sustained low inflation trajectory and the need to stimulate economic growth through cheaper borrowing costs.

Role and Powers of the MPC

The Monetary Policy Committee plays a pivotal role in Pakistan’s economic framework. Under Section 9E of the SBP Act 1956:

Policy Formulation: The MPC is tasked with formulating monetary policy, which includes setting intermediate monetary objectives, determining key interest rates, and managing the supply of reserves.
Regulatory Powers: It has the authority to make regulations that support its decisions.
Statement and Measures: The committee not only decides but also communicates its policy stance through statements and implementations of measures like the recent rate cuts.

The MPC’s actions are crucial for maintaining economic balance, controlling inflation, and ensuring that monetary policy aligns with broader economic goals, including growth and stability.

The backdrop to these meetings includes Pakistan’s ongoing efforts to manage economic recovery post various global and domestic challenges. The reduction in CPI-based inflation from previous highs indicates a gradual stabilization, which is vital for consumer confidence and investment. The MPC’s decisions in 2025 will be watched closely by investors, policymakers, and the public for cues on the country’s economic direction.