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The State Bank of Pakistan has decided to keep the policy interest rate unchanged at 11.0 percent, according to the latest announcement by the Monetary Policy Committee (MPC).
This is the second time in a row that the policy rate has been held steady, signaling a cautious approach in the face of rising energy prices and inflation pressures.
The central bank noted that inflation has slightly worsened due to unexpected hikes in energy costs, but is still expected to stabilize within the 5 percent to 7 percent target range in the coming months.
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The MPC stated that Pakistan’s economy is showing signs of improvement. High-frequency data indicate that economic activity is picking up, with real GDP growth expected to accelerate in the upcoming fiscal year (FY26).
The committee also highlighted the importance of continuing a balanced mix of monetary and fiscal policies to maintain stability and support growth. It stressed the need for structural reforms to boost long-term development.
The policy rate has steadily declined from 17.5 percent in September 2024 to 11.0 percent now, reflecting the central bank’s gradual shift toward supporting growth while keeping inflation in check.
