KARACHI: The State Bank of Pakistan (SBP) on Monday announced a reduction in its benchmark interest rate, cutting the policy rate by 50 basis points to 10.5 percent, down from 11 percent.
The decision was taken during a meeting of the Monetary Policy Committee (MPC), where key economic indicators were reviewed before finalizing the move. This marks the first rate cut after the SBP had kept the policy rate unchanged at 11 percent for the last four consecutive policy meetings.
The last reduction in the interest rate was made in May 2025, when the central bank slashed the rate by 100 basis points.
According to economic experts, Pakistan’s monetary policy remains closely aligned with commitments under the International Monetary Fund (IMF) program.
However, with inflation showing signs of easing while borrowing costs remained high, the business community had been persistently demanding a cut in interest rates.
The SBP’s latest decision is expected to provide relief to traders and businesses by lowering the cost of borrowing and supporting economic activity.
The central bank stated that the rate cut was made after carefully assessing domestic and external economic conditions, inflation trends, and growth prospects.
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