The Monetary Policy Committee (MPC) of the State Bank of Pakistan has convened a meeting today (Monday) to decide on the key interest rate.
Governor of the State Bank, Jameel Ahmed, will brief the media in a press conference following the meeting. At the previous meeting on December 15, 2025, the committee surprised the market by cutting the policy rate by 50 basis points to 10.50 percent, as average inflation remained within the target range of 5 to 7 percent.
Analysts expect further monetary easing in today’s meeting and predict that the policy rate could be reduced by 50 to 100 basis points. They note clear signs of improvement in Pakistan’s economy, supported by declining inflation, better stability in external accounts, and an increase in foreign exchange reserves.
This expectation has also been reinforced by the recent Government of Pakistan market Treasury Bills auction, where the cut-off yields for three- and six-month maturities fell into single-digit territory for the first time in four years.
The business community has already demanded a significant reduction in the key policy rate. Their position is that bringing the interest rate to single-digit levels is essential for boosting industrial activity and economic growth.
It is worth noting that Pakistan’s policy rate had reached a peak of 22 percent in June 2024. However, with improvements in economic indicators, the Monetary Policy Committee has so far reduced the interest rate by a total of 11.50 percentage points, bringing it down to the current level of 10.5 percent.
