SBP keeps policy rate unchanged at 11.5%

According to Business Recorder, the State Bank of Pakistan has kept its policy rate at 11.5% after its Monetary Policy Committee met for the second time in fiscal 2026-27. The result matched what analysts had forecast. Seven of the ten MPC members backed the hold, which the committee called a majority decision.

The central bank had lifted the rate by 100 basis points in April, marking its first hike in almost three years, after an unexpected 50 basis point cut in December 2025. It has left the rate steady since then. According to the statement, a renewed escalation in the Middle East pushed global commodity prices higher and kept supply chains under pressure.

Headline inflation climbed to 11.1% in August from 9.2% in July, while core inflation came in slightly below expectations. The committee noted contained pressure on the external account, supported by strong remittances and financial inflows, and said SBP reserves now exceed $3 billion worth of Eurobond proceeds added to earlier buying. The MPC warned that uncertainty has grown, particularly from the worsening geopolitical environment, and that risks to inflation have increased.