Singapore June 11 2024: Pakistan’s central bank may have room to cut its benchmark interest rate by another 600 basis points by June 2025 as inflation eases further, according to a Citigroup note.
The base effect supporting further disinflation will eventually pave the way for easing, analysts including Baqar M. Zaidi and Johanna Chua write in a note.
“We continue to think they will secure a Staff Agreement for a $7 billion-to-$8 billion IMF program by July. Thus, we don’t expect any significant FX destabilization effects from this rate cut,” according to the note.
The Monetary Policy Committee (MPC) decided to reduce the policy rate by 150 bps to 20.5 percent in yesterday meeting given significant decline in inflation since February was broadly in line with expectations, the May outturn was better than anticipated earlier.
