Pakistan’s central bank cut interest rates by 100bps at its scheduled meeting earlier this week. But with the economy recovering, inflation concerns continuing to linger and the central bank sounding more hawkish, we think the pace of easing will slow. We are forecasting just 200bps more cuts between now and the end of the year. In contrast, Sri Lanka’s central bank left its policy rate unchanged this week. However, with the economy still stuck in deflation, we are expecting the CBSL to resume its easing cycle soon.
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