Daily Times

The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) will meet on Tuesday (July 27) at SBP Karachi to decide about monetary policy for the next two months. SBP Governor Dr Reza Baqir will address a press conference on the same day after the MPC meeting.

The financial market participants are expecting the key policy rate to remain the same in the upcoming monetary policy announcement. In a poll conducted by Topline Research, around 89 percent participants said they expect no change in the policy rate in July 2021, compared with 73 percent in the previous poll. However, it showed that around seven percent of the participants expect an increase of 25 basis points in the policy rate, while four percent anticipate an increase of 50 basis points.

None of the participants expected a cut in the policy rate this time, compared with 12 percent which were expecting a reduction in the previous poll. In total, 64 percent of the participants expect an increase in the policy rate in 2021. Around 51 percent of the participants are expecting an increase of 50 basis points during 2021, while 13 percent of the participants are expecting a rise of 100 basis points during the year.

The majority of the participants i.e. around 57 percent expect the rupee/dollar between 160 and 165 by the end of 2021, while 37 percent expect the rupee/dollar to be between 165 and 170.

In its last monetary policy statement on May 28, 2021, the central bank had maintained the policy rate at 7 percent.