Regulatory Alerts2025-12-15 | DMMD Circular No. 09SBP Policy Rate and Overnight Repo and Reverse-Repo Facilities
The State Bank of Pakistan has lowered its Policy Rate to 10.50 percent and set the overnight reverse repo ceiling at 11.50 percent alongside a 9.50 percent repo floor. These adjustments preserve a 200 basis point interest rate corridor and ensure money market overnight rates track the target rate. The revised framework becomes effective on December 16, 2025, while all other existing monetary directives remain in force.
Circulars/Notifications -
Domestic Market & Monetary Management Department
DMMD Circular No. 09 of 2025
15th December, 2025
The Presidents/ Chief Executives, All Commercial Banks/ Primary Dealers
Dear Sirs/Madams,
SBP's Policy Rate and Overnight Repo / Reverse-Repo Facilities
Please refer to DMMD Circular No. 04 of 2025 dated May 05, 2025. Following changes are announced with reference to this circular:
SBP has decided to decrease ‘Policy Rate’ (Target Rate) from 11.00% to 10.50%.
SBP Overnight Reverse Repo (Ceiling) rate will be at 11.50%, i.e., 100 bps above the SBP Policy Rate.
The SBP Overnight Repo (Floor) rate will be at 9.50%, i.e., 100 bps below the SBP Policy Rate.
Accordingly, the Floor and Ceiling levels for the Interest Rate Corridor are 9.50% and 11.50% p.a., respectively (i.e., width of 200bps).
SBP will continue to ensure that the money market overnight rate remains close to the SBP Policy Rate (Target Rate).
Above changes are effective from December 16th, 2025. Other instructions on the subject shall, however, remain unchanged.
Yours Sincerely,
Sd/-
(Dr. Mahmood ul Hasan Khan) Director
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