A. Turkey
B. Pakistan
C. Argentina
D. Egypt

In the first quarter of 2026, the State Bank of Pakistan (SBP), the country’s central bank, lowered its key policy rate to 12%. The rate was lowered from a record high of 22% in January with this 100 basis point cut, the sixth in a row since June 2024. Cooling inflation, which dropped to 1.5% in February 2026—a nine-year low—as part of Pakistan’s larger economic recovery efforts, was the driving force behind the decision.

Early in 2026, the policy rates of the other countries on the list varied: Egypt’s rate was between 19.0 and 20.0%, Argentina’s was roughly 28.28%, and Turkey’s was around 37%.

Key Points About Pakistan’s Rate Cut to 12%:

• Policy Rate: Reduced to 12% in January 2026, following six consecutive cuts

• Inflation Context: Inflation dropped to 1.5% in February 2026, the lowest in nine years

• Previous Peak: Rate was slashed from a record high of 22% in June 2024

• Economic Context: Part of Pakistan’s economic recovery supported by a $7 billion IMF loan program