KARACHI, Dec 15 (Reuters) – Pakistan’s central bank cut its key interest rate by 50 basis points to 10.5% on Monday, the bank said on its website, breaking a hold on the rate for four meetings in a move that surprised analysts and came despite IMF warnings to avoid premature easing.
All 12 analysts in a Reuters poll had expected the State Bank of Pakistan (SBP) to hold the policy rate at 11%.
Monday’s reduction takes the total easing since rates peaked at 22% to 1,150 basis points, after the SBP delivered 1,100 bps of cuts between June 2024 and May 2025 and then held the rate steady for four meetings before Monday’s move.
Inflation edged down to 6.1% in November from 6.2% in October, within the SBP’s 5%–7% target band, with analysts expecting it to rise again later in FY26 as base effects fade and food and transport prices stay volatile.
An IMF staff report last week warned against premature easing, calling for policy to remain data-dependent to anchor expectations and rebuild external buffers, even as Pakistan received a $1.2 billion disbursement under its loan programme.
(Reporting by Ariba Shahid; Editing by YP Rajesh)
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