SBP likely to drop interest rate today in new monetary policy

The State Bank of Pakistan (SBP) will announce the Monetary Policy on Monday (today), ARY News reported.

The MPC will review overall financial and fiscal situation, major economic indicators, data of different sectors and major developments taken place since announcement of the previous monetary policy while its decisions would be conveyed by the central bank through the Monetary Policy Statement on the same day.

It is being expected by market experts that SBP will drop the interest rate by 50 to 100bps as the current interest rate stands at 12 per cent.

In the FY2024-25, the SBP has slashed interest rate by 10 per cent after improvement in the economic indcators.

The inflation also recorded a drop in April 2025, while the current account is also surplus with $1.20bln.

The MPC, in its previous meeting on March 10, 2025, adopted a cautious approach and kept the policy rate unchanged at 12 per cent taking inflation expectations and position of external account into consideration.

The committee had noted the improvement in economic indicators including current account balance, inflation, external inflows, monetary management and foreign reserves but it was cautious about inching up of inflation in subsequent months as well as uncertainties in global economic policy environment.

Considering the developments and evolving risks, the MPC had also stressed the need for continuing fiscal consolidation to ensure price stability, which is essential for sustainable economic growth.