Scheduled Gathering of Monetary Policy Committee on Coming Monday: SBP Announcement
On June 16, 2025, the Monetary Policy Committee (MPC) of SBP will gather for the big decision: policy rate. And boy, the gossips are flying! Expectations are buzzing, analysts are chiming in, and the rumor mill is churning overtime.
The SBP has already spilled the beans; a press release will be dropping on Monday, same as the decision itself. In its last round-up on May 5, 2025, the MPC slashed the policy rate by a whopping 100 basis points to 11%. This was the lowest policy rate since March 2022 (9.75%). They've cut it by a mind-boggling 1,100bps since June—quite a rollercoaster ride from its all-time high of 22%.
At the time, the MPC pointed out that inflation took a nosedive during March and April due to reduced administered electricity prices and a continuous slide in food inflation. Core inflation also dipped in April, thanks to delightful base effects and reasonable demand conditions.
The MPC felt the inflation outlook had become rosier, but admitted that global uncertainty lurked around the corner. Tariff skirmishes and geopolitical jitters could pose a threat, the MPC warned, emphasizing the need for a measured monetary policy stance.
Looking at the latest Consumer Price Index (CPI)-based inflation figures, released by the Pakistan Bureau of Statistics (PBS), the inflation picture has been witnessing some stabilization. In May 2025, CPI-based inflation rose to 3.5% on a year-on-year basis, in contrast to the meager 0.3% in the previous month and the whopping 11.8% in May 2024.
So, what's the consensus among the analyst lot? Most are betting on the MPC keeping the policy rate stationary at 11%. Recent trends, including moderating inflation, have given the central bank grounds to argue for maintaining the status quo. That being said, some pundits have shown dissenting views, hoping for a further rate cut of 50 to 100 basis points. The majority seems to favor the steady path, though.
Keep an eye out for the MPC's announcement on Monday, June 16. The decision will drop, alongside the Monetary Policy Statement, so stay tuned for the latest!
The analysts are speculating that the Monetary Policy Committee (MPC) of SBP might maintain the policy rate at 11%, given the recent trend of moderating inflation in the finance sector. However, some pundits express hopes for a further reduction of 50 to 100 basis points in the interest rate at the upcoming meeting on June 16, 2025.
