The policy Rates expected to decrease by 7% percent in 2024.

 The State Bank of Pakistan (SBP) is expected to cut its benchmark policy rate from seven percentage points to 7% percent in the coming calendar year 2024.

The move is expected to restore affordable financing to industries that are heavily dependent on bank loans, particularly sectors such as textiles, cement, steel and agriculture.
The projection comes from Sana Tawfiq, Economist at Arif Habib Limited titled “Headwinds Overcoming Commercial Banks – Flexible Near-Term Profit Expectations”.

Sana Tawfiq said the energy sector, including oil and gas exploration firms and power companies, would also indirectly benefit from the reduction in policy rates.

The report predicts economic growth of 3.3 percent in the current fiscal year, due to the easing of fiscal policy, which is expected to benefit the industrial, agricultural and services sectors.

Economists suggest that the central bank may initiate a token cut of 50 to 100 basis points in the policy rate in its January 2024 monetary policy announcement.

The rate cut is expected to reduce inflation significantly after March 2024, with inflation expected to remain as high as around 28 percent in November, mainly due to a large increase in gas prices.

The government will benefit significantly from the rate cut as it will reduce interest payments on rising debt, provide fiscal space for essential development expenditure and stimulate economic activity.
The current account deficit is expected to remain around $4 billion, with the rupee stabilizing, supporting economic growth.

The report also suggests that the Pakistan Stock Exchange is poised for significant growth as major financial institutions move investments into the stock market.

The report concludes that near-term profitability is expected to remain strong for the banking sector in the first half of calendar year 2024 due to a reversal in the policy rate cycle. policy interest rates 2024 , سٹیٹ بنک شرح سود state bank interest rates