Karachi, April 30, 2025 – The State Bank of Pakistan (SBP) has officially scheduled the announcement of its next monetary policy statement for Monday, May 5, 2025.
The decision was shared through a notification issued by the central bank on Wednesday, outlining that the Monetary Policy Committee (MPC) will convene to review current economic indicators and determine the future course of monetary policy.
Following the MPC meeting, the SBP will release the monetary policy statement through a formal press release later the same day. This announcement is being closely watched by market participants, analysts, and investors alike, as the central bank’s monetary policy stance serves as a key signal for interest rates, inflation expectations, and overall economic sentiment.
Market speculation is growing that the SBP may opt for a 50 basis point cut in the benchmark interest rate, which currently stands at 12%. If implemented, the policy rate would be revised downward to 11.5%. This expectation stems from the recent decline in inflation and growing concerns over slowing economic activity across various sectors.
According to a recent research note by Arif Habib Limited, the SBP now has adequate room to adopt a more accommodative monetary policy. Headline inflation has dropped significantly, hitting just 0.7% in March 2025, and is projected to fall further to 0.45% in April. These figures suggest a strong real interest rate of 11.3%, which analysts argue supports a gradual monetary easing cycle.
In its previous meeting in March, the SBP chose to maintain the monetary policy rate at 12%, citing ongoing risks from global commodity price fluctuations and concerns regarding Pakistan’s external sector stability. Nonetheless, the SBP acknowledged the continued decline in inflation, which could now justify a shift in policy direction.
For the first ten months of the fiscal year 2024–25, the average headline inflation stands at 4.88%, a dramatic improvement compared to 26.22% during the same period last year. However, core inflation remains sticky at 7.72% in April, with a ten-month average of 10.05%, suggesting that while headline inflation has cooled, underlying price pressures still pose challenges for the SBP’s monetary policy outlook.