SBP may reduce policy rate to 10% on July 31

The monetary policy rate is anticipated to decline by up to 100 basis points, to 10 percent in an upcoming meeting of the State Bank of Pakistan’s (SBP) Monetary Policy Committee (MPC) on July 31. 

The SBP’s MPC meeting is scheduled to be held on Wednesday. The meeting would be chaired by Governor Jameel Ahmad would review the economic indicators to decide the key policy rate for the first time in the current fiscal year 2025-26.

According to economists, the central bank is expected to cut the policy rate by 50 to 100 basis points, bringing it down from the current 11 percent to between 10.5 and 10 percent. This would mark the first significant rate cut in Pakistan after a prolonged period of monetary tightening.

Analysts believe the decision will be cautious, reflecting evolving macroeconomic indicators and the SBP's aim to balance inflation control with growth stimulation.

Read: SBP keeps policy rate unchanged at 11% amid Iran-Israel conflict

To enhance transparency and provide guidance to market participants, the SBP has also issued an advance calendar for its Monetary Policy Committee meetings for FY2025-26. The central bank has scheduled eight MPC meetings during the fiscal year.

The central bank stated that if any meeting cannot be held on the scheduled date due to unforeseen circumstances, a new date will be announced accordingly. The tentative calendar for the next fiscal year will be released in July 2026.

The move to pre-announce meeting dates is part of SBP’s efforts to build confidence among investors and stakeholders by fostering predictability and institutional transparency in the country's monetary policy framework.