SBP maintains policy rate at 11.5% amid inflation concerns

The State Bank of Pakistan (SBP) has decided to keep the policy interest rate unchanged at 11.50% for the next six weeks, citing prevailing economic conditions and continued global uncertainty.

SBP Maintains Policy Rate at 11.5% Amid Inflation Concerns

KARACHI: The State Bank of Pakistan (SBP) has decided to keep the policy interest rate unchanged at 11.50% for the next six weeks, citing prevailing economic conditions and continued global uncertainty.

The decision was announced after the Monetary Policy Committee (MPC) conducted its latest review of key economic indicators, inflation trends, and external sector developments. According to the central bank, the current stance reflects a cautious approach aimed at maintaining economic stability amid uncertain global and domestic conditions.

The committee noted that although there are encouraging signs of relative stability in some global markets, particularly hopes of easing tensions in the Middle East, the overall international environment remains uncertain. In this context, fluctuations in global crude oil prices continue to pose a risk to inflation.

The SBP highlighted that inflationary pressures linked to energy prices have not fully subsided. As a result, the outlook for price stability remains sensitive to external shocks, especially movements in international oil markets.

The central bank stated that its decision was based on a comprehensive assessment of domestic economic indicators, including inflation trends, fiscal performance, and external sector balances. The MPC emphasized the importance of maintaining a balanced monetary stance to support both price stability and sustainable economic growth.

It is worth noting that in the previous monetary policy review held on April 27, the SBP had increased the policy rate by 100 basis points to 11.50%, citing rising inflation risks and external pressures at the time.

The latest review marks the final monetary policy decision of the fiscal year 2025–26, a period closely monitored by businesses, investors, and financial markets for signals regarding economic direction and interest rate trends.

Following the announcement, the policy rate will remain at 11.50% for the next six weeks, while future adjustments will depend on inflation performance, global commodity prices, particularly oil, and overall macroeconomic stability.

Economists say the decision reflects a cautious but steady monetary approach, aimed at balancing inflation control with the need to support economic activity in a challenging global environment.