The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) will hold its final meeting of 2025 today (Monday) to review the country’s key economic indicators and decide on the benchmark interest rate.

A majority of economists and financial market experts expect the central bank to keep the policy rate unchanged.

In its previous meeting on October 27, the MPC had maintained the policy rate at 11%, citing a lower-than-expected economic impact from recent floods, which reduced the need for an immediate adjustment in interest rates.

According to Business Recorder, market analysts believe the SBP will once again adopt a cautious approach at Monday’s meeting and leave the policy rate unchanged.

According to Arif Habib Limited, the central bank may prioritise stability as the base effect that had helped suppress inflation is gradually fading.

The brokerage house noted that a slight increase in the current account deficit and the early stage of economic recovery support a “wait-and-see” stance for now.

All 12 analysts surveyed by Reuters have also forecast that the SBP will not cut interest rates at Monday’s meeting.

The report said that following warnings from the International Monetary Fund (IMF) about potential inflationary risks, analysts have pushed back expectations of any rate cuts to late 2026 or even beyond.

Most analysts believe the central bank is unlikely to begin easing monetary policy before the final months of fiscal year 2026, while some expect the process could be delayed until fiscal year 2027.

At its previous meeting, the MPC noted that headline inflation had risen to 5.6% in September, while core inflation remained at 7.3%.

The MPC noted that the country’s economy is gradually picking up, as reflected in various indicators.

However, it warned that uncertainty still persists due to volatility in global commodity prices, challenges faced by exports, and the risk of possible food shortages in the country.

Since the last meeting, several key developments have also taken place.

The rupee has shown a slight improvement and gained about 0.2%, while petrol prices have remained largely steady.

On the global front, oil prices have declined by more than 6% since the last MPC meeting and are now trading around $57 per barrel.

The Pakistan Bureau of Statistics pointed out that year-on-year inflation stood at 6.1% in November 2025.

The State Bank also recorded a current account deficit of $112 million in October, a shift from a surplus of $83 million in September and a surplus of $296 million in October 2024.

The SBP said its foreign exchange reserves rose to $14.58 billion as of December 5, 2025, while net foreign exchange reserves held by commercial banks stood at $5.03 billion.

This brings Pakistan’s total liquid foreign exchange reserves to $19.61 billion.

Taking these factors into account, analysts expect the SBP to maintain the policy rate at its current level at Monday’s meeting.