ISLAMABAD, July 25 -- Pakistan is expected to see its key interest rate cut to 10% or 10.5% starting July 31, as the State Bank of Pakistan (SBP) moves to ease monetary policy amid signs of economic stabilization. This would be the first reduction in the policy rate after a prolonged period of high interest rates aimed at controlling inflation.

The SBP's Monetary Policy Committee (MPC), chaired by Governor Jameel Ahmad, will hold its first meeting of the fiscal year 2025-26 on July 31 to decide the new rate. Analysts predict the SBP may reduce the policy rate by 100 to 150 basis points from the current 11%, though some expect a more cautious cut between 50 and 100 basis points given ongoing inflationary pressures and global uncertainties...