Islamabad: Pakistan's monetary policy is expected to remain steady in the near term, with the State Bank of Pakistan (SBP) likely to adopt a cautious wait-and-see approach in the upcoming Monetary Policy Committee (MPC) meeting due to emerging inflationary pressures.

According to AKD Securities Limited, despite the recent successful progress with the IMF program and the implementation of contractionary fiscal policies that have helped stabilize the Pakistani Rupee and improve the external account, the central bank is expected to proceed cautiously. These developments have set a backdrop that may allow for future monetary easing, but immediate aggressive adjustments appear unlikely.

Forecasts by AKD Securities project a potential policy rate cut of 550 basis points to 15% by the end of FY25, with the majority of this easing anticipated in the first half of the fiscal year. This expected shift in monetary policy is predicted to spotlight sectors that stand to benefit from relaxed monetary conditions and ongoing structural reforms. Key sectors highlighted include oil and gas, banking, and fertilizers, with top picks for investment including OGDC, PPL, MARI, MCB, UBL, MEBL, FFC, LUCK, MLCF, FCCL, and INDU.