KARACHI – The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) is scheduled to meet on Monday, June 16, 2025, to decide on the policy rate, the central bank announced on Thursday. The decision will be communicated via a press release on the same day.
In its last meeting on May 5, the MPC slashed the benchmark policy rate by 100 basis points (bps) to 11%, the lowest level since March 2022, as inflation showed a sharp decline in the preceding months. That cut brought the cumulative reduction since June 2023 to 1,100 bps, down from an all-time high of 22%.
The May decision came amid declining inflation, primarily due to falling food prices and lower administered electricity tariffs. Core inflation had also eased, with the MPC citing “favourable base effects amidst moderate demand conditions.”
However, the outlook has since become more complex. Consumer Price Index (CPI)-based inflation rose to 3.5% year-on-year in May 2025, up from just 0.3% in April, according to data from the Pakistan Bureau of Statistics. While still significantly lower than the 11.8% recorded in May 2024, the uptick may factor into the committee’s deliberations.
In a Poll conducted by Topline Securities, 56% of the market participant expect a status quo in upcoming monetary policy meeting compared to 31% in last poll. While 44% are expecting a rate cut of at-least 50bps.
Out of total 44% rate cut participants, 19% are expecting 50bps cut, and 25% are expecting 100bps cut.
In its May statement, the MPC acknowledged improved inflation expectations but warned that global trade tensions and geopolitical risks could disrupt economic stability. The committee had therefore signalled a “measured” approach going forward, balancing inflation management with support for economic recovery.
The June 16 meeting will be closely watched by markets, particularly as the recently announced federal budget 2025–26 aims for fiscal consolidation and a 4.2% GDP growth target, amid expectations of further monetary easing to support investment.
