KARACHI – State Bank of Pakistan (SBP) announced to keep benchmark interest rate unchanged at 11pc, as inflation trends and economic recovery remain broadly aligned with projections.
The decision was made during a scheduled meeting of the SBP’s Monetary Policy Committee (MPC), which noted that May’s inflation rose to 3.5% year-on-year — in line with expectations — while core inflation eased slightly.
“Inflation is projected to rise modestly in the near term but remain within the target range during the fiscal year 2025–26,” the MPC said in its official statement.
The committee highlighted signs of a gradual economic rebound, expected to strengthen further over the coming year due to the delayed impact of earlier interest rate cuts. However, it also flagged rising risks to the external sector.
“A sustained widening of the trade deficit and sluggish financial inflows pose challenges,” the MPC warned, adding that certain budget proposals for FY26 could increase import demand and further strain the trade balance.
Given these concerns, the MPC emphasized that maintaining the current policy rate is essential to ensure macroeconomic and price stability in the months ahead.
The next monetary policy meeting is expected in August 2025, where the committee will reassess the evolving economic landscape.
