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The Monetary Policy Committee (MPC) of Pakistan has reduced the policy rate by 50 basis points to 10.5 percent effective from December 16, 2025, aiming to support economic growth and ease financial conditions amid improving macroeconomic indicators.
There was a Monetary Policy Committee meeting on October 27, 2025, and at that meeting the policy rate was kept unchanged at 11 percent before the December 2025 decision. The MPC’s decision to hold the rate continued a pause after earlier easing this year.
The committee’s latest decision balances inflation control with the need to stimulate credit growth and investment. The detailed monetary policy statement, which will outline the economic rationale and future guidance, is expected to be released shortly.
Lower policy rates are expected to reduce borrowing costs for businesses and consumers, potentially boosting private sector investment and lending. Analysts suggest the move will provide relief to sectors under financial stress while encouraging economic expansion.
An official from the State Bank of Pakistan said,
“The rate cut reflects the MPC’s assessment of stabilizing macroeconomic conditions and the need to support sustainable growth.”
