KARACHI – The State Bank of Pakistan (SBP) has announced its monetary policy, under which the policy interest rate has been reduced by 50 basis points.
According to reports, a meeting of the State Bank of Pakistan’s Monetary Policy Committee was held today to determine the policy rate for the next one and a half months.
The State Bank reduced the interest rate by 50 basis points, bringing it down from 11 percent to 10.5 percent.
It is noteworthy that the SBP had maintained the policy rate at 11 percent during the last four reviews. In May 2025, the central bank had reduced the policy rate by 100 basis points to 11 percent, after which no change was made until now.
Meanwhile, the International Monetary Fund (IMF) has emphasized continuing the current monetary policy to control inflation and maintain exchange rate stability.
Single-Digit Interest Rate Essential for Economic Activity: LCCI President
President of the Lahore Chamber of Commerce and Industry (LCCI), Faheem-ur-Rehman Sehgal, in his statement, called for bringing the policy rate to single digits to provide relief to businesses. He said high interest rates have severely affected industry and investment.
He added that expensive financing has made business costs unbearable. A reduction in interest rates can help create employment opportunities, and economic recovery is not possible without easing monetary policy. Industry, trade, and SMEs are awaiting immediate relief.
Faheem-ur-Rehman Sehgal further stated that a high policy rate is damaging export competitiveness. Lowering interest rates is essential to revive investment, and the business community expects realistic decisions from policymakers. He stressed that a single-digit interest rate is crucial for promoting economic activity.
Cut in interest rate to benefit SMEs the most: PM
Prime Minister Muhammad Shehbaz Sharif welcomed the State Bank’s decision to reduce the interest rate by 50 basis points, terming it a positive step for the welfare of the business community and the general public.
In his statement, the Prime Minister said that by the grace of Allah, the hard work of the government’s economic team is bearing fruit. He praised Finance Minister Muhammad Aurangzeb, Minister of State for Finance Bilal Azhar Kayani, the Finance Secretary, and their team for their efforts toward Pakistan’s economic development.
He said the country has achieved economic stability and is moving toward growth. The business community and the public have made sacrifices for economic stability, and, Alhamdulillah, the government is providing relief to the people as much as possible due to improving economic conditions.
The Prime Minister added that the reduction in interest rates and access to cheaper loans will benefit small and medium-sized businesses the most.
