ISLAMABAD: Pakistan is expected to see its key interest rate cut to 10% or 10.5% starting July 31, as the State Bank of Pakistan (SBP) moves to ease monetary policy amid signs of economic stabilization. This would be the first reduction in the policy rate after a prolonged period of high interest rates aimed at controlling inflation.
The SBP’s Monetary Policy Committee (MPC), chaired by Governor Jameel Ahmad, will hold its first meeting of the fiscal year 2025-26 on July 31 to decide the new rate. Analysts predict the SBP may reduce the policy rate by 100 to 150 basis points from the current 11%, though some expect a more cautious cut between 50 and 100 basis points given ongoing inflationary pressures and global uncertainties.
This step reflects growing confidence in the country’s economic recovery, supported by improved fiscal discipline and external account stabilization. However, the SBP remains cautious to ensure that inflation remains in check while promoting growth.
To increase transparency and help investors and businesses plan better, the SBP has published a full calendar for all eight MPC meetings in the current fiscal year. Alongside the July 31 meeting, others are scheduled for September 15, October 27, December 15, January 26, March 9, April 27, and June 15. The central bank will issue the next calendar in July 2026.
The SBP also assured that if any meeting dates change due to unforeseen situations, they will promptly notify the public. This structured approach is expected to build trust among stakeholders and stabilize market expectations about future monetary policy.