ISLAMABAD: The State Bank of Pakistan (SBP) announced on Monday that it will maintain the policy rate at 11 percent, following a meeting of the Monetary Policy Committee (MPC) chaired by the SBP Governor.
“The Monetary Policy Committee decided to keep the policy rate unchanged at 11 percent in its meeting held on September 15, 2025,” the SBP said on its official website. A detailed policy statement is expected to be released soon.
Economic analysts had widely predicted that the SBP would hold the rate steady due to ongoing flood-related economic challenges in the country. The floods have affected agricultural output, trade, and overall economic activity, limiting options for rate adjustments.
According to SBP data, inflation stood at 3 percent in August 2025, showing a stable trend. The current account deficit for July was recorded at $240 million. Experts noted that despite moderate inflation, the broader economic stress caused by floods leaves little room for easing monetary policy.
In the previous monetary policy review in June 2025, the SBP had also maintained the interest rate at 11 percent. At that time, it observed a rise in inflation to 3.5 percent year-on-year, which aligned with expectations, while core inflation declined slightly.
The SBP highlighted that global oil prices have rebounded sharply, influenced by geopolitical developments in the Middle East and some easing in US-China trade tensions. The central bank emphasized that the real interest rate remains adequately positive to keep inflation within the target range of 5–7 percent.
Market participants and economists now await the full monetary policy statement from the SBP for guidance on future economic and monetary measures. Analysts believe that the central bank is prioritizing stability amid external uncertainties and domestic challenges, including natural disasters and trade fluctuations.
By maintaining the policy rate, the SBP aims to balance economic growth, inflation control, and financial stability while providing a cautious framework for recovery in flood-affected regions.
The SBP continues to monitor domestic and international developments closely to adjust monetary measures as necessary in the coming months.
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