Karachi, June 12, 2025 – The State Bank of Pakistan (SBP) has confirmed that it will unveil its next monetary policy decision on Monday, June 16, 2025. The Monetary Policy Committee (MPC) of the SBP will convene on the same day to deliberate on the interest rate stance, following which the central bank will issue a Monetary Policy Statement through an official press release.
According to market analysts, the SBP is widely expected to maintain the current interest rate in its upcoming monetary policy decision. A recent poll conducted by Topline Securities revealed that 56% of market participants anticipate a status quo, compared to only 31% in the previous survey. Meanwhile, 44% foresee a potential rate cut—19% predicting a 50 basis point (bps) reduction and 25% expecting a 100 bps cut.
Analysts argue that although the SBP has some room for further easing—given that FY26 inflation is projected to average between 6–7%, creating a real interest rate of 400–500 bps (against a policy rate of 11%)—external uncertainties may encourage the central bank to proceed cautiously.
One of the primary concerns influencing the monetary policy outlook is the rebound in international crude oil prices, now hovering between $68–70 per barrel. These price movements, driven by renewed geopolitical tensions in the Middle East and ongoing U.S.–China negotiations, have historically impacted Pakistan’s inflation trajectory. Additionally, upcoming domestic tariff adjustments, including gas and electricity prices, have yet to be fully assessed for their inflationary impact.
Minutes from the SBP’s last monetary policy meeting on May 5, 2025, showed that 8 out of 9 committee members favored a 100 bps cut. However, current 6-month KIBOR and T-bill yields have edged higher—now standing at 11.09% and 10.95%, respectively—indicating a cautious market sentiment.
Topline Research also surveyed expectations on interest rates, inflation, and the PKR-USD exchange rate for FY26. About 42% of respondents believe interest rates will settle between 8–10% by December 2025, while 58% expect them to remain above 10%. On inflation, 69% forecast a range of 6–8%. For the currency, 64% see the rupee settling between Rs280–290 per dollar, while 36% anticipate it exceeding Rs290 by year-end.
The SBP’s forthcoming monetary policy decision will be pivotal in shaping economic direction, particularly as the government targets inflation at 7.5% and the IMF projects it at 7.7% for FY26.