ISLAMABAD – State Bank of Pakistan (SBP) maintained key interest rate unchanged at 11.5% in its first Monetary Policy Committee (MPC) meeting of fiscal year 2026-27, as policymakers remain cautious amid inflation concerns and rising global uncertainties.
The decision, announced after the MPC’s fifth meeting of the year, was largely in line with market expectations, with analysts predicting that the central bank would avoid any major shift in its monetary stance.
SBP Governor Jameel Ahmad said inflation pressures are expected to ease further, adding that Consumer Price Index (CPI) inflation is likely to decline in July. He said the central bank expects inflation to settle near the upper limit of its 5–7% target range by the end of the current fiscal year.
However, hopes for an immediate rate cut remained overshadowed by growing external risks, particularly renewed tensions in the Middle East and concerns over a possible spike in global oil prices — a factor that could directly impact Pakistan’s import bill and inflation outlook.
Investor expectations had already pointed towards a hold decision. A survey conducted by Topline Securities showed that 97% of respondents expected the SBP to keep the policy rate unchanged, while only 3% anticipated a 100 basis point reduction.
The central bank had also maintained the policy rate at 11.5% during its previous MPC meeting on June 15, 2026, stating that the existing monetary policy stance remained appropriate to gradually bring inflation down toward its medium-term target.
While inflation remains a key concern, Pakistan’s economic indicators have shown some improvement. Analysts highlighted that a stronger external account position, cautious monetary policy, improved credit ratings, disciplined fiscal management, and progress on structural reforms are providing support to economic stability.
According to market experts, the SBP’s latest decision reflects a balancing act, maintaining control over inflation while avoiding steps that could disrupt economic recovery.
For now, businesses and consumers will have to wait longer for any reduction in borrowing costs, as the central bank continues to monitor inflation trends, global oil movements, and geopolitical developments before making its next move.
