Contrary to the analyst’s expectations for a significant cut, the State Bank of Pakistan (SBP) on Wednesday kept the key policy rate unchanged at 11 percent following a high-level meeting.
The decision was announced by SBP Governor Jameel Ahmed following the Monetary Policy Committee (MPC) meeting.
The MPC reviewed the overall financial and fiscal situation, major economic indicators, data of different sectors, and major developments taken place since the announcement of the previous monetary policy.
The monetary policy committee, in its previous meeting on 16 June 2025, had taken a cautious stance and kept the policy rate unchanged at 11 percent in view of inflation expectations, potential external sector risks, and multiple risks emanating from regional geopolitical conflicts.
On the other hand, the business and Industrial community of Karachi, emphasising the significance of a lower policy rate in boosting economic activities in the country, reiterated their demand to slash the policy rate down to a single digit in line with inflation.
While addressing a press conference, the SBP Governor said inflation remained slightly below the 5–7% target range, reinforcing the committee’s decision to keep the policy rate unchanged at 11 percent.
Governor Ahmad noted that although inflation had remained slightly below the target range of 5 to 7 percent in recent months, upward pressure is beginning to build again. He attributed this to anticipated increases in energy prices and external risks.
“The Monetary Policy Committee reviewed the external account situation in detail and, considering the potential impact of energy price adjustments, decided to keep the policy rate unchanged,” Ahmad said.
He emphasized that maintaining the policy rate at the current level is aimed at anchoring inflation expectations and preserving macroeconomic stability.
