US EditionPakistan Cuts Key Rate by 50 Bps to 10.5% in Surprise Move
The State Bank of Pakistan lowered the rate by 50 basis points to 10.5% to boost growth amid stronger manufacturing and stable inflation, marking the first cut after a hold.
- On Dec 15, the State Bank of Pakistan cut its key interest rate by 50 basis points to 10.5 per cent, breaking a four-meeting hold to support sustainable growth while keeping inflation within target.
- Amid a pickup in large-scale manufacturing, the State Bank of Pakistan noted inflation averaged within the 5 per cent-7 per cent target during the July-November period of fiscal year 2026.
- After large cumulative easing, markets expected a pause as the bank had delivered 1,100 basis points , paused for four meetings, and Monday's move brings total easing since the 2023 peak to 1,150 basis points.
- The SBP kept its FY26 growth outlook in the upper half of its 3.25 per cent-4.25 per cent range and projects reserves could reach $17.8 billion by June 2026, with reserves above $15.8 billion after a $1.2 billion IMF disbursement.
- Shahid Habib of Arif Habib said the cut `appears well-justified given prevailing macroeconomic conditions` and stronger reserves may have `eased concerns over the rupee and the current account deficit`.
14 Articles
14 Articles
SBP cuts policy rate by 50 basis points to support growth amid contained inflation
The State Bank of Pakistan reduced the policy rate by 50 basis points, effective December 16, citing contained inflation and improving economic activity, while acknowledging persistent risks from the global environment and sticky core inflation. Announcing the decision after its meeting on Monday, the Monetary Policy Committee (MPC) said average inflation remained within the medium-term target range of 5–7 percent during July–November FY26, supp…
Central bank slashes policy rate by 50 bps to 10.5pc
The State Bank of Pakistan (SBP) on Monday slashed its policy rate by 50 bps to 10.5 per cent, stating that the rate would come into effect from December 16. In a statement, the monetary policy committee (MPC) noted that inflation remained within the 5-7 per cent target range on average during July-November FY26, though it said that core inflation proved to be “relatively sticky”. “On balance, the inflation outlook remains broadly unchanged, ma…
SBP Cuts Policy Rate; PM Highlights Relief
Prime Minister Muhammad Shehbaz Sharif welcomed the State Bank of Pakistan’s decision to cut the policy rate by 50 basis points, calling it a timely measure to promote economic activity, ease financial pressure on the public, and support businesses, especially small and medium enterprises. The prime minister appreciated the monetary easing, stating it reflects improving macroeconomic indicators and successful economic management by the governmen…
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