Considering the current economic landscape and the influence of geopolitical factors, the SBP likely made a wise choice by maintaining the policy rate instead of yielding to various external pressures.

I have consistently highlighted the significant liquidity challenges stemming from inadequate tax revenue and disappointing export performance. A reduction in policy rate does not automatically equate to economic stimulation as it merely offers some relief to borrowers, whether they are corporations or the government.

It remains to be seen how the reduction in the Credit Reserve Requirement (CRR) by 1 percent that would yield an additional Rs 311 billion in liquidity will actually contribute to economic growth. According to SBP data from November 2025, commercial banks’ lending to the private sector stands at Rs 13,421 billion, while the SBP’s open market operation (OMO) injection on January........

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