Overview
- The reduction takes effect on Dec 16, breaking a four-meeting hold and marking the first move since May’s cut to 11%.
- The move defied market consensus for no change as the IMF had urged a tight, data‑driven stance under its program.
- Policymakers cited average inflation within the 5–7% target and improving activity, including 4.1% growth in large‑scale manufacturing, though core inflation remains sticky.
- The SBP kept FY26 growth guidance in the upper half of its 3.25–4.25% range and said inflation could temporarily firm late in FY26 before easing.
- Foreign reserves rose above $15.8 billion after about $1.2 billion from the IMF, as the government welcomed the cut and business groups pressed for deeper, single‑digit rates.