Karachi: Pakistan's central bank is poised to adjust its monetary policy stance as improving financial inflows and economic indicators create an environment conducive to easing. The State Bank of Pakistan (SBP) is anticipated to reduce interest rates, buoyed by significant real interest rates, a notable current account surplus, and the recent approval of funds by the International Monetary Fund (IMF), according to an analysis by AKD Securities Limited.

The report suggests that the SBP may cut interest rates by 100 basis points to 11.0%, with a further reduction of 150 basis points expected over the course of the next calendar year. This move is seen as a response to sluggish economic activity and is aimed at stimulating growth.

Inflation rates, which have been a focal point for the central bank, are projected to decline significantly. The year-on-year inflation is estimated to fall to 0.6% in April 2025, marking a six-decade low, down from 0.7% in the previous month. This reduction is attributed to decreases in key indices such as food, transport, and housing.

The decision to potentially ease monetary policy comes amid a favorable economic backdrop, characterized by a two-decade high in the current account surplus. This surplus, combined with the IMF's financial support, has provided the central bank with a robust platform to consider easing measures.

AKD Securities Limited, through its research channel, has highlighted the importance of these developments in shaping the SBP's monetary policy decisions. The anticipated easing is expected to support economic growth by making borrowing more affordable and encouraging investment.