SBP slashes policy rate by 50 bps to 10.5pc

KARACHI (Dunya News) - The State Bank of Pakistan (SBP) on Monday announced a cut of 50 basis points in the policy interest rate as part of its latest monetary policy decision.

According to the monetary policy statement issued by the central bank, the new policy rate has been set at 10.50 percent.

Economic analysts had widely expected the interest rate to remain unchanged at 11 percent; however, the Monetary Policy Committee (MPC) took an unexpected decision to reduce the rate by 50 basis points.

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 is noteworthy that earlier in May 2025, the State Bank had reduced the policy rate by 100 basis points, after which the interest rate had been maintained at 11 percent for several consecutive policy periods.

Earlier, it was reported that SBP would maintain its key policy rate at 11pc as inflation risks linked to food prices and external pressures continue to weigh on the outlook.

PSX starts new week with strong gains, reaches record high

A majority of analysts and surveys conducted by leading brokerage houses anticipated no change in the policy rate.

Headline inflation has shown an upward trend in recent months, increasing from 4.1pc in July to 6.1pc in November, largely driven by disruptions in food supply following recent floods.