The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP), in its meeting on Monday, announced the sixth successive cut of a 100 basis point cut in the policy rate, bringing it down to 12 per cent, effective January 28, 2025.
The decision comes amid key economic developments, including improved activity in the real sector, a cumulative surplus in the current account, a significant increase in revenue, and rapidly declining inflation.
"In its meeting today, the MPC decided to cut the policy rate by 100 bps to 12 per cent, effective from January 28, 2025," SBP Governor Jameel Ahmad said in a news conference after the meeting.
The decision reflects optimism over declining inflation, which reached 4.1% in Dec, driven by moderate domestic demand and supportive supply-side factors.
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