The State Bank of Pakistan (SBP) is scheduled to hold its first Monetary Policy Committee (MPC) meeting of 2026 on January 26, with market participants anticipating key decisions on interest rates. A recent survey indicates strong expectations of further rate cuts to support economic growth and stabilize financial markets.
According to the survey, about 80 per cent of respondents expect the SBP to reduce interest rates, with 56 per cent predicting a 50 basis points cut and 15 per cent foreseeing a one percentage point reduction in the policy rate. The survey highlights widespread optimism for easing monetary conditions.
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Meanwhile, 20 per cent of participants expect the central bank to maintain the current interest rate, while five per cent anticipate a 25 basis points reduction. Only three per cent of respondents foresee a larger 75 basis points cut, showing limited support for aggressive easing.
The MPC had previously lowered the policy rate by 50 basis points on December 15, 2025, signaling the bank’s willingness to stimulate the economy further. Analysts suggest that additional rate cuts could encourage investment, boost lending, and support overall economic activity in the coming months.
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Looking ahead, nearly 49 per cent of survey participants believe the policy rate will remain at 10 per cent until June 2026, while 46 per cent expect it to fall below 10 per cent. Improved remittances, strengthening rupee value, and easing inflation could influence these projections.
Economists note that the SBP’s decisions in January could set the tone for the first half of the year, with investors and businesses closely watching the impact of potential rate adjustments on borrowing costs and market liquidity. The MPC’s outcome will be pivotal for Pakistan’s economic strategy.