Financial Experts Anticipate Aggressive Rate Cut in Upcoming Monetary Policy

Karachi: Financial professionals are preparing for a significant reduction in the Policy Rate in the upcoming November 4 Monetary Policy announcement, with a majority predicting a cut of at least 200 basis points. A substantial portion of experts anticipate an even more aggressive cut, which may further drive down secondary market yields, though this decrease is expected to be less pronounced than the anticipated rate cut.

According to JS Global, the survey of over 80 financial professionals from institutions and family offices reveals expectations that the trend of declining yields will persist. Since the start of the easing cycle in June 2024, yields have already decreased by approximately 650 basis points, outpacing the 450 basis points reduction in the Policy Rate. JS Global projects a more gradual approach to the easing cycle moving forward, with an anticipated rate cut of 150 basis points in the upcoming policy. This aligns with a projected rise in inflation, with the Consumer Price Index (CPI) expected to rebound to an average of 11.5% in FY26 from 8.5% in the latter half of FY25.

A larger cut in the forthcoming Monetary Policy Statement may influence the magnitude of reductions in future announcements.

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