ISLAMABAD: Pakistan’s central bank on Monday cut its policy rate by 50 basis points to 10.5%.
The previous rate cut came in May. Since then, the benchmark rate had remained at 11%, despite easing inflation.
Headline inflation fell to 3% earlier this year. It rose to 6.1% in November, slightly below 6.2% in October.
The International Monetary Fund had urged Pakistan to keep liquidity tight to contain expected inflation. The advice came despite pressure from industry for rate cuts.
In its second review released on Thursday, the IMF said monetary policy must remain tight and data-dependent. The Fund stressed the need to keep inflation expectations anchored.
The IMF noted that the State Bank of Pakistan maintained positive real interest rates on a forward-looking basis.
📢 Monetary Policy Committee has decided to decrease the policy rate by 50 basis points to 10.5 percent w.e.f. December 16, 2025.#SBPMonetaryPolicy
— SBP (@StateBank_Pak) December 15, 2025
It said the tight policy stance played a key role in reducing inflation. The Fund added that the stance should continue to ensure price stability and rebuild external buffers.
Also Read: PM Shehbaz Sharif says Pakistan economy stabilised, IMF support and reforms signal path to growth
Industry leaders have repeatedly called for lower interest rates to improve global competitiveness.
