The State Bank of Pakistan (SBP) has decided to keep the key policy rate unchanged at 11%, defying market expectations for a rate cut amid easing inflation and a drive to stimulate economic growth.
The announcement came on July 30, 2025, following a Monetary Policy Committee (MPC) meeting chaired by SBP Governor Jameel Ahmed, who briefed the media after the session.
Governor Ahmed explained that although inflation had hit a low in April, it edged up in May and June, primarily due to rising energy prices and base effect adjustments. He cautioned that moderate inflationary pressures may persist in the months ahead, largely tied to ongoing volatility in global energy markets.
External Sector Shows Strength
The SBP chief highlighted positive trends in the external sector, stating that exports had grown by 4%, helping to reinforce current account stability. He emphasized the importance of further export expansion to sustain this momentum.
Additionally, worker remittances saw a notable surge, increasing by $8 billion, which played a critical role in maintaining a current account surplus.
Governor Ahmed also underlined Pakistan’s improved macroeconomic indicators, confirming that the country had met all its external debt obligations on schedule. He further revealed that despite making $26 billion in external payments, foreign exchange reserves had still grown by $5 billion, reflecting greater financial resilience.
Market Reaction
Analysts had widely anticipated a further reduction in the benchmark rate following earlier cuts, as part of the SBP’s strategy to support economic recovery. However, the central bank’s decision signals a cautious approach, aiming to strike a balance between growth and inflation control amid global uncertainties.
The next policy review by the MPC is expected in a few months, depending on inflation trends, energy price dynamics, and fiscal developments.
