US EditionInflation Eases as Pakistan’s Central Bank Slashes Interest Rates
- The State Bank of Pakistan cut its policy interest rate by 100 basis points to 11 percent on May 6, 2025.
- This decision came after inflation dropped significantly in March and April, largely driven by decreases in food prices and reductions in electricity tariffs.
- Year-on-Year headline inflation fell significantly to 0.3 percent in April, while core inflation declined amid weak demand and supportive base effects.
- The rate cut, larger than most market forecasts, was described by Topline Securities' CEO as exceeding expectations and reflects improved inflation outlook.
- Despite easing inflation, Pakistan’s economy faces challenges like sluggish GDP growth, fiscal risks, and external vulnerabilities requiring careful macroeconomic management.
17 Articles
17 Articles
Policy rate slashed to 11%
Beating the market expectations of a 50 basis points (bps) cut, the State Bank of Pakistan (SBP) has slashed the policy rate by 100 bps to 11%, effective May 6, 2025, reflecting easing inflationary pressures. However, the central bank has highlighted that the broader economic landscape remains fraught with challenges, including sluggish GDP growth, weak large-scale manufacturing, persistent fiscal slippages, and external sector vulnerabilities. …
Inflation Eases as Pakistan’s Central Bank Slashes Interest Rates
Inflation Eases as Pakistan’s Central Bank Slashes Interest Rates On Monday, Pakistan’s central bank announced a cut in the policy interest rate by 1 per cent, lowering it to 11 per cent due to easing inflationary pressures. The State Bank of Pakistan's decision came after April's inflation was recorded at a surprisingly low 0.3 per cent.This strategic move by the Monetary Policy Committee marks a significant shift as the central bank has previo…
SBP Overnight Repo Rate Falls to 10% After Policy Rate Cut
Karachi May 6 2025: Following the yesterday SBP decision to decrease ‘Policy Rate’ (Target Rate) from 12.00% to 11.00%, the central bank announced Overnight Repo (Floor) rate will be at 10.00%, i.e., 100 bps below the SBP Policy Rate. SBP Overnight Reverse Repo (Ceiling) rate will be at 12.00%, i.e., 100 bps above the SBP Policy Rate. Accordingly, the Floor and Ceiling levels for the Interest Rate Corridor are 10.00% and 12.00% p.a., respectivel…
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