Traditionally, the State Bank of Pakistan (SBP) revises its policy rate up or down, or keeps it unchanged in relation to the inflation reading and economic activities. Low inflation mainly leads to a reduction in the policy rate for ramping up economic activities and vice versa. The Express Tribune conducted a brief survey to know the expectation of research houses about the policy rate. At present, the real interest rate (the benchmark interest rate minus inflation reading) is around 1% negative. It may encourage the SBP to increase the policy rate around that time.

Source: The Express Tribune November 22, 2020 03:22 UTC