State Bank Announces New Monetary Policy: Interest Rate Reduced by 1%

Karachi: The State Bank of Pakistan (SBP) has announced its new monetary policy, reducing the policy rate by 1%.
The Monetary Policy Committee (MPC) of the SBP, in its recent meeting, decided to cut the interest rate by 100 basis points, bringing it down from 12% to 11%. This decision will come into effect from May 6, 2025.
The committee noted that the reduction in electricity prices and the continuous decline in food inflation during March and April led to a significant decrease in overall inflation. Core inflation also showed a reduction in April, reflecting the favorable base effects primarily due to subdued demand conditions.
Overall, the MPC’s analysis indicates that the inflationary outlook has improved further compared to previous forecasts. However, the committee highlighted that rising global trade tariffs and the increasing uncertainty in international political conditions may pose challenges to the economy in the near future.