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The State Bank of Pakistan (SBP) has decided to keep its policy rate unchanged at 12 percent in its latest monetary policy review.
The decision comes as inflation in February 2025 fell below expectations, driven by lower food and energy prices. However, core inflation remains stubbornly high, posing ongoing challenges.
Economic activity is showing signs of recovery, supported by strong consumer and business confidence. However, rising imports and weak financial inflows have put pressure on the country’s external accounts.
The SBP stressed that the impact of previous rate cuts is now being felt. The bank aims to balance inflation control, targeting a range of 5-7 percent, with efforts to support sustainable economic growth.
A cautious monetary policy stance will continue to ensure macroeconomic stability.
