ISLAMABAD: Finance Minister Muhammad Aurangzeb suggested the possibility of reducing Pakistan’s policy rate later this year, noting the slowdown in inflation and stable economic indicators. Speaking at the 78th Independence Day and Marka-e-Haque celebrations at the Rawalpindi Chamber of Commerce & Industry (RCCI), he indicated that there is room for further policy rate cuts, emphasizing that decisions regarding the policy rate remain under the purview of the State Bank of Pakistan (SBP) and the Monetary Policy Committee (MPC).
Aurangzeb’s comments came after the MPC kept the policy rate unchanged at 11% last month, defying market expectations of a potential rate cut. The committee had cited decelerating inflation, which stood at 3.2% year-on-year in June 2025, largely due to falling food prices.
The minister also praised the government’s economic reform agenda, citing upgrades from S&P and Fitch, and expressed optimism that Moody’s would soon follow suit. He highlighted the reduction of reciprocal tariffs with the United States from 29% to 19%, which is expected to provide a significant competitive edge for Pakistani exporters.
Aurangzeb further discussed the government’s achievements, including a reduction in fiscal deficits, a surplus current account, and record remittance growth. He emphasized that the government aims to maintain fiscal discipline and reduce debt servicing costs while transforming the Federal Board of Revenue (FBR).
