Pakistan's State Bank likely cuts rate to 11.5%

Pakistan's State Bank will announce its key policy rate on May 5, with analysts anticipating a 50 basis point cut. This would bring the rate to 11.5% due to falling inflation. The Monetary Policy Committee is meeting Monday to decide the rate, following a recent drop in inflation to a historic low of 0.7% in March. The central bank's decision will be influenced by a strong real interest rate and weak industrial production. The expected rate cut comes after a period of monetary easing, with the bank having previously lowered the rate six times since June 2024. The market is divided on the exact outcome.