Karachi, June 16, 2025: The State Bank of Pakistan (SBP), in its latest Monetary Policy Committee (MPC) meeting held on June 16, has decided to maintain the policy rate at 11.0%, citing balanced economic indicators and the need to support macroeconomic stability.

According to the official announcement, inflation figures for May remained broadly aligned with the MPCs expectations. Encouragingly, Pakistan’s economic growth is gradually gaining momentum and is projected to improve further next year, supported by the ongoing effects of previous rate cuts.

However, the Committee acknowledged emerging risks to the economic outlook, particularly due to the widening trade deficit, regional geopolitical tensions, and global commodity price volatility, especially in oil. These factors led to the cautious decision of keeping the interest rate unchanged.

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The MPC stated that todays decision is aimed at maintaining the delicate balance between encouraging economic growth and controlling inflation. The SBP emphasized that the real interest rate remains positive, which is expected to support the inflation target range of 5 – 7% in the coming months.

Mixed Reactions from the Public and Analysts

Public and expert reactions to the decision have been mixed. Some praised the SBP for avoiding further rate cuts, viewing the 11% policy rate as a safeguard for financial stability and inflation control.

This is a wise move. Lowering it further couldve risked inflation resurgence. I hope its even raised in coming months, said one observer.

Conversely, others questioned the logic behind maintaining a relatively high policy rate despite reports that inflation has fallen below 4%. Critics argue that such a rate discourages both savings and business borrowing, thereby hampering economic activity.

“Strangely, they claim inflation is below 4%, yet the rate is held at 11% for the second time. It should have been brought down to 7 or 8%, a social media user commented. At this level, saving in banks or borrowing for business makes no sense.

The SBPs next monetary policy announcement is expected later this year, where economic developments and global conditions will once again be reviewed to determine any potential adjustments.