SBP updates on monetary policy transmission
The monetary easing cycle that began in June 2024 resulted in a substantial reduction in the policy rate, from a recent high of 22% to 10.5% by December 2025. The cumulative reduction of 1,150 bps over one and a half years has been transmitted to market interest rates, the Central Bank said in its latest Monetary Policy report. The short-term money-market rates adjusted broadly in line with the policy rate, and the weighted-average lending and deposit rates have declined considerably from their recent peak levels.