The State Bank of Pakistan (SBP) on Monday announced a cut of 50 basis points in the policy interest rate as part of its latest monetary policy decision. According to the monetary policy statement issued by the central bank, the new policy rate has been set at 10.50 percent.
Economic analysts had widely expected the interest rate to remain unchanged at 11 percent; however, the Monetary Policy Committee (MPC) took an unexpected decision to reduce 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.