SBP keeps policy rate unchanged at 11%

Karachi (Web Desk): The State Bank of Pakistan (SBP) on Monday chose to keep the key policy rate steady at 11% for the next one and a half months, reaffirming its cautious monetary stance as the economy continues to grapple with persistent inflation and external sector pressures.

The Monetary Policy Committee (MPC), led by SBP Governor Jameel Ahmad, convened in Karachi to review the country’s economic outlook, taking into account major indicators such as inflation dynamics, foreign exchange reserves, and the balance of payments situation.

After thorough deliberations, the central bank announced that the interest rate would remain unchanged at 11% reflecting a prudent approach aimed at safeguarding macroeconomic stability while allowing space for a measured recovery.

In its statement, the SBP noted that the decision was shaped by several considerations, including heightened inflationary pressures, economic damage caused by floods, and ongoing policy directions under the International Monetary Fund (IMF) framework.

The central bank emphasized that holding the rate at its current level would help manage inflation expectations and sustain financial stability, avoiding any abrupt impact on the growth trajectory.

During the session, the MPC also assessed fluctuations in the exchange rate, movements in international oil prices, and the overall health of Pakistan’s foreign exchange reserves.

The committee further discussed import and export performance and expressed concern over the widening trade deficit, which remains a key challenge for the country’s external stability.