The State Bank of Pakistan (SBP) announced on Monday a 50 basis points cut in the policy interest rate as part of its latest monetary policy decision.
According to the central bank’s monetary policy statement, the new policy rate is now 10.50 percent.
Economic analysts largely expected the interest rate to stay at 11 percent; however, the Monetary Policy Committee (MPC) made a surprising decision to lower the rate by 50 basis points.
It is noteworthy that earlier in May 2025, the State Bank had reduced the policy rate by 100 basis points, after which the interest rate had been maintained at 11 percent for several consecutive policy periods.
Earlier, it was reported that SBP would maintain its key policy rate at 11pc as inflation risks linked to food prices and external pressures continue to weigh on the outlook.
A majority of analysts and surveys conducted by leading brokerage houses anticipated no change in the policy rate.
Headline inflation has shown an upward trend in recent months, increasing from 4.1pc in July to 6.1pc in November, largely driven by disruptions in food supply following recent floods.