<p></p><ul><li><span style="font-family:Arial, Helvetica, sans-serif;font-size:medium;">Despite the substantial policy rate cuts of 900bps in the
recent monetary easing cycle, real interest rates on current, 1-yr forward and
core measures are still overly positive (9/5/4%), a reflection of the
substantial decline in inflation during CY24. Viewed together with being in an
IMF program, external account surplus in 1HFY25, stable exchange rate and
negative output gap, we believe the Central Bank will continue reducing the
policy rate taking it to 12.0% (↓100bps) at the Monetary Policy meeting
scheduled on 27 th Jan’25. At this level, the monetary policy stance would
still be significantly tight (as required by IMF). The primary downside risk to
our interest rate and inflation projection emanates from repercussions of the
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