On Monday, the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) decided to keep the key policy rate steady at 11.5 percent.
This decision comes in light of ongoing tensions in the Middle East, which have led to an increase in global oil prices and heightened inflationary pressures.
While bankers anticipated that the central bank would hold the rate steady, some analysts had forecasted a 50-basis-point hike in the policy rate.
The SBP’s MPC made this decision during its second meeting of the current fiscal year.
Prior to making their decision, the committee assessed the latest economic conditions, including inflation rates, economic growth, developments in the external sector, and other significant financial indicators.
Previously, the SBP had maintained the policy rate at 11.5% during its meeting on June 15, following a 100 basis point increase to 11.5% in April.
This latest decision is being closely monitored by businesses, investors, and financial markets for indications regarding the future trajectory of monetary policy.
The central bank has reiterated that its monetary policy approach is focused on keeping inflation within the medium-term target range of 5–7% while fostering sustainable economic growth.