{"id":102169,"date":"2025-05-07T10:52:00","date_gmt":"2025-05-07T05:52:00","guid":{"rendered":"https:\/\/www.zameen.com\/news\/?p=102169"},"modified":"2025-05-06T16:00:43","modified_gmt":"2025-05-06T11:00:43","slug":"sbp-surprises-markets-with-100bps-rate-cut","status":"publish","type":"post","link":"https:\/\/www.zameen.com\/news\/sbp-surprises-markets-with-100bps-rate-cut.html","title":{"rendered":"SBP surprises markets with 100bps rate cut amid easing inflation"},"content":{"rendered":"\n<p>KARACHI: The State Bank of Pakistan (SBP) on Monday slashed its benchmark policy rate by 100 basis points to 11%, marking its most aggressive cut in the current easing cycle and bringing the rate to its lowest level since March 2022.<\/p>\n\n\n\n<p>The decision by the Monetary Policy Committee (MPC) exceeded market expectations, with most analysts forecasting a more modest 50bps reduction or a hold. The central bank has now cut the policy rate by a total of 1,100bps since June 2024, when it stood at a record high of 22%.<\/p>\n\n\n\n<p>Read: <a href=\"https:\/\/www.zameen.com\/news\/sbp-reports-32-5-growth-in-remittances.html\" target=\"_blank\" rel=\"noreferrer noopener\">SBP reports 32.5% growth in remittances, totaling USD 24 bn<\/a><\/p>\n\n\n\n<p>The MPC cited a sharp deceleration in inflation \u2014 particularly in March and April \u2014 as a key reason for the larger-than-expected cut. It noted reductions in electricity prices and food inflation, especially wheat, as major contributing factors. Headline inflation eased to 0.3% year-on-year in April, while core inflation dropped to 8% from around 9% in previous months.<\/p>\n\n\n\n<p>Despite the improved inflation outlook, the MPC flagged external risks, including global tariff uncertainty and geopolitical tensions, which could impact economic stability. \u201cThe Committee emphasized the importance of maintaining a measured monetary policy stance,\u201d the SBP said.<\/p>\n\n\n\n<p>On the economic front, provisional GDP growth for Q2 FY25 was recorded at 1.7% year-on-year, while Q1 growth was revised up to 1.3%. March\u2019s current account posted a surplus of $1.2 billion, driven by strong remittance inflows, helping to stabilise foreign exchange reserves.<\/p>\n\n\n\n<p>Read: <a href=\"https:\/\/www.zameen.com\/news\/forex-reserves-rise-to-usd-15-94-bn-sbp.html\" target=\"_blank\" rel=\"noreferrer noopener\">Forex reserves rise to USD 15.94 bn: SBP<\/a><\/p>\n\n\n\n<p>The central bank reiterated that the real interest rate remains \u201cadequately positive\u201d and inflation is expected to gradually rise but stay within the 5\u20137% target range, subject to risks from food price volatility, energy adjustments, and global commodity trends.<\/p>\n\n\n\n<p>Market reactions were mixed. While some analysts had anticipated the central bank to hold rates steady due to IMF programme considerations and uncertain foreign inflows, others saw room for easing amid sustained disinflation and moderate domestic demand.<\/p>\n\n\n\n<p>The policy rate cut takes effect from May 6, 2025.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>KARACHI: The State Bank of Pakistan (SBP) on Monday slashed its benchmark policy rate by 100 basis points to 11%, marking its most aggressive cut in the current easing cycle and bringing the rate to its lowest level since March 2022. The decision by the Monetary Policy Committee (MPC) exceeded market expectations, with most analysts forecasting a more modest 50bps reduction or a hold. The central bank has now cut the policy rate by a total of 1,100bps since June 2024, when it stood at a record high of 22%. Read: SBP reports 32.5% growth in remittances, totaling USD 24 bn The MPC cited a sharp deceleration in inflation \u2014 particularly in March and April \u2014 as a key reason for the larger-than-expected cut. It noted reductions in electricity prices and food inflation, especially wheat, as major contributing factors. Headline inflation eased to 0.3% year-on-year in April, while core inflation dropped to 8% from around 9% in previous months. Despite the improved inflation outlook, the MPC flagged external risks, including global tariff uncertainty and geopolitical tensions, which could impact economic stability. \u201cThe Committee emphasized the importance of maintaining a measured monetary policy stance,\u201d the SBP said. On the economic front,&hellip;<\/p>\n","protected":false},"author":18,"featured_media":76277,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[15015],"tags":[64509,64505,62483,64506,37769,34475,64510,5890,61118,64504,62923,1109,64508,64507,45543],"persona":[],"class_list":{"0":"post-102169","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-legal-taxation","8":"tag-digital-tax-enforcement","9":"tag-fbr-performance","10":"tag-federal-excise-act","11":"tag-illegal-cigarettes","12":"tag-income-tax-ordinance","13":"tag-pakistan-economy","14":"tag-poultry-sector-compliance","15":"tag-revenue-collection","16":"tag-shehbaz-sharif","17":"tag-sugar-sector-monitoring","18":"tag-tax-evasion-crackdown","19":"tag-tax-reforms","20":"tag-tax-system-overhaul","21":"tag-tobacco-sector","22":"tag-track-and-trace-system","23":"cat-15015-id"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>SBP surprises markets with 100bps rate cut - Zameen News<\/title>\n<meta name=\"description\" content=\"the prime minister stressed the need for urgent reforms to remove systemic inefficiencies in tax collection and overhaul outdated practices...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.zameen.com\/news\/sbp-surprises-markets-with-100bps-rate-cut.html\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"SBP surprises markets with 100bps rate cut - Zameen News\" \/>\n<meta property=\"og:description\" content=\"the prime minister stressed the need for urgent reforms to remove systemic inefficiencies in tax collection and overhaul outdated practices...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.zameen.com\/news\/sbp-surprises-markets-with-100bps-rate-cut.html\" \/>\n<meta property=\"og:site_name\" content=\"Pakistan Real Estate News &amp; 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