SBP Holds Policy Rate at 11% Despite Cuts Hoped

Islamabad, July 30, 2025, 10:57 PM PKT — The State Bank of Pakistan’s (SBP) Monetary Policy Committee (MPC) has stunned markets, opting to hold the policy rate steady at 11% on Wednesday, defying expectations of a 50-100 basis point cut, as confirmed by Governor Jameel Ahmad in a press briefing, per official data. Despite average headline inflation of 4.5% in the last fiscal year (below the 5-7% target), a sharp drop in food inflation, and declining core inflation, the MPC maintained its stance, echoing its June 16, 2025, decision, citing looming inflationary risks from rising import demand and global commodity uncertainties.

Analysts from Topline Securities and Arif Habib Limited had predicted a 50 bps cut, citing lower inflation, a manageable external position, a $2.1 billion current account surplus in FY2024-25 (versus a $2.07 billion deficit in FY24), and year-on-year inflation at 3.2% in June 2025 (down from 3.5% in May), alongside oil prices falling 4% to $69 per barrel. Yet, the SBP prioritized stability, promising close monitoring and policy adjustments in the second half. Web context on monetary policy shows past hesitancy, while posts found on X reflect disappointment—some question missed opportunities, others defend caution. Critically, the narrative of “prudent policy” may mask underlying caution—web data hints at external pressures, and X sentiment suggests distrust in timely easing, pointing to economic tension.