Governor of the State Bank of Pakistan (SBP) Jameel Ahmad has said that any further reduction in the interest rate will depend on the outcome of the ongoing International Monetary Fund (IMF) review and the economic impact of the recent floods, even though inflation is showing signs of stability.
According to details, while speaking to Bloomberg, SBP Governor Jameel Ahmad said that despite easing after a prolonged period of tight policy, the central bank remains “very cautious” regarding monetary policy.
He noted that the new price pressures caused by the floods and risks related to external funding could limit further policy easing.
The governor forecast that inflation may temporarily exceed the upper limit of the medium-term target range of 5%–7% by early 2026, but on average, it will remain within that range during the current and next fiscal years.
These comments come ahead of the next Monetary Policy Committee (MPC) meeting scheduled for October 27, while the IMF team continues the second review of Pakistan’s $7 billion loan program.
Pakistan’s economy, which narrowly avoided default two years ago, is now stabilizing with the help of IMF funding through debt repayments and the rebuilding of foreign reserves.
