SBP keeps policy rate unchanged at 11.5%

Mettis Global reported that the State Bank of Pakistan kept its policy rate unchanged at 11.5% on September 14, 2026, with seven of the ten Monetary Policy Committee members backing the hold. The Committee views the current stance as appropriate for returning inflation to its 5-7% range over the medium term. It made the call as the ongoing Middle East conflict pushed already high global commodity prices higher and extended supply chain disruptions.

Inflation climbed to 11.1% in August from 9.2% in July, mainly because of higher food prices for wheat, allied products and perishables. Core inflation rose to 8.7%, while a change to the HSD pricing mechanism brought the diesel price down sharply in August, partly cushioning higher global costs. The Committee still expects inflation to ease gradually toward the upper end of the 5-7% band by June 2027, but says the risks have increased significantly.

Foreign exchange reserves rose to $21.4bn after a $3bn Eurobond issue and sustained FX purchases, while Moody's upgraded Pakistan to B3 with a stable outlook. Private sector credit grew 13.4% y/y, although broad money growth eased to 11.6%. The Committee anticipates stronger private lending as economic activity recovers.