Islamabad, August 13, 2025: Finance Minister Muhammad Aurangzeb on Wednesday said there was scope for further reduction in Pakistan’s policy rate before the end of 2025, pointing to declines in both average and core inflation.
“At present, the policy rate is at 11%. I am always careful to note that the policy rate and market-based exchange rate fall under the purview of the State Bank of Pakistan and its Monetary Policy Committee,” Aurangzeb told reporters. “That said, my personal view is that, given the current inflation trends, there is room to do more on the policy rate, and I am hopeful that during this calendar year we will see it move south.”
The central bank kept its key interest rate unchanged at 11% on July 30, defying market expectations, citing a worsened inflation outlook due to rising energy costs. The next monetary policy announcement is scheduled for September 15.
Aurangzeb linked monetary easing to broader economic stability, stressing that national security and economic progress are intertwined. He highlighted positive trends including a 60% rise in the stock exchange, increased investor participation, a 250,000 surge in company registrations, a 38% jump in private sector lending, and the government’s payment of Rs 1 trillion in debt servicing over the past year.
The minister also pointed to reduced electricity tariffs, anticipated declines in energy costs, and ongoing tax administration reforms. On the fiscal side, he said the government had begun “right-sizing” 45 ministries and departments, while accelerating privatisation of state-owned enterprises. He confirmed progress on agreements with China and plans to issue Panda Bonds by year-end.
Extending Independence Day greetings, Aurangzeb called for national unity to build a prosperous future, underscoring the sacrifices made for Pakistan’s sovereignty.
