Date 29 July 2025

Pakistan’s central bank is expected to reduce its key interest rate by 50 basis points to 10.5% in its upcoming policy announcement, according to a Reuters poll of 14 analysts. June inflation dropped to 3.2%, with FY24 average inflation falling to a 9-year low of 4.49%. Improved foreign reserves ($14bn+) and easing inflation give SBP room to cut, though analysts urge caution due to rising imports and rupee pressures. The SBP has already slashed rates by 11 percentage points since June 2024. S&P recently upgraded Pakistan’s credit rating to 'B-' on stronger reserves and fiscal reforms, reinforcing expectations of gradual monetary easing ahead.