The State Bank of Pakistan’s Monetary Policy Committee is scheduled to convene today to determine the country’s benchmark interest rate for the next two months, with markets widely anticipating a rate cut of 50 to 100 basis points.
The central bank’s policy rate currently stands at 12 percent, following cumulative reductions of 10 percentage points earlier this year. While inflation edged up slightly by 0.3 percent in April, analysts suggest there is room for a further easing of rates.
Economic observers believe the SBP could lower the policy rate by as much as 200 basis points by the end of 2025, citing improved external balances and a stabilising macroeconomic outlook.
The Monetary Policy Committee will assess the overall economic landscape, including inflation trends, fiscal indicators, and the balance of payments, before announcing its decision via the Monetary Policy Statement later in the day.
According to the central bank, the current account registered a surplus of $1.2 billion up to March, compared to a $1.8 billion deficit over the same period in the previous financial year. Remittances surged to a record $4.1 billion in March 2025, boosting foreign exchange reserves and further strengthening the case for a rate cut.