SBP Rate Cut Stance Signals Two Years of Economic Stability
The SBP rate stance remains cautious despite calls for bold cuts. Governor Jameel Ahmad said stability should continue for the next two years. He explained that Pakistan has moved past the worst phase of its crisis.
Now, the focus has shifted to stability, lower inflation, and stronger reserves. Moreover, the central bank expects this momentum to hold. As a result, it plans to support growth without risking fresh instability.
No Unconventional Rate Cuts Ahead
The governor made it clear that the SBP will avoid aggressive rate cuts. He stressed that policy decisions will remain careful and data driven.
However, the prime minister had called for bold monetary easing. Even so, the central bank wants to protect recent gains. Ahmad warned that sharp cuts could trigger inflation again.
Therefore, the SBP will follow a steady and cautious path.
Focus Shifts To Long Term Growth
The central bank has already completed two key recovery stages. First, it helped control the crisis. Then, it restored relative stability.
Now, the SBP will support development finance for sustainable growth. For example, it plans to help productive sectors expand over time.
Pakistan’s average growth rate has stayed near 3.7% for decades. Instead of chasing rapid expansion, the SBP wants balanced progress.
External Accounts Show Improvement
The current account deficit has improved steadily.
It fell from 4.7% of GDP in 2022 to a surplus in 2025. Strong remittances played a major role in this shift. Looking ahead, the SBP expects a manageable range of 0% to 1% of GDP.
Exports show mixed results, though. Non food exports grew by 5% to 6%, which shows diversification. However, rice exports dropped sharply during early fiscal 2026. They fell 47% compared with the same period last year. To support industry, the government introduced new incentives. For instance, it cut electricity tariffs and adjusted export finance rates.
IMF Outlook And Interest Savings Debate
Pakistan remains under a $7 billion IMF programme. This facility will run until late 2027.
The governor said future independence depends on fiscal discipline. He urged responsible spending and better resource use. He also clarified a common misconception about rate cuts. Lower rates reduce debt costs, but they also cut SBP income. Last year, the SBP transferred Rs2.4 trillion to the government. This year, that amount may drop to about Rs2 trillion.
