KARACHI – The State Bank of Pakistan (SBP) announced on Monday that it will keep the benchmark interest rate unchanged at 11 percent for the next one and a half months. The decision aims to stabilize the economy amid rising inflation and external pressures.
The Monetary Policy Committee (MPC), chaired by SBP Governor Jameel Ahmad, met in Karachi to review key economic indicators, including inflation trends, foreign exchange reserves, and the balance of payments position. After a thorough assessment, the central bank decided to maintain the policy rate, signaling a cautious approach to support gradual economic recovery.
Key Factors Behind the Decision
The State Bank highlighted several factors influencing its decision, including persistent inflation, economic losses from recent floods, and guidance from the International Monetary Fund (IMF). Officials noted that keeping the interest rate steady would help manage inflation expectations while avoiding unnecessary strain on economic growth.
The MPC also examined exchange rate fluctuations, global oil price trends, and Pakistan’s foreign exchange reserves. Discussions included the performance of imports and exports, as well as the widening trade deficit, which continues to pose challenges to external stability.
Experts say that the SBP’s decision reflects a balancing act between curbing inflation and supporting economic activity. By maintaining the interest rate at 11 percent, the central bank aims to provide predictable monetary conditions for businesses and investors while monitoring external risks.
The State Bank reaffirmed its commitment to using monetary policy as a tool to stabilize the economy and ensure sustainable growth. Analysts anticipate that the central bank will continue to closely monitor economic trends and adjust policies as necessary in the coming months.
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Pakistan’s economy faces multiple headwinds, including global commodity price volatility, domestic inflationary pressures, and flood-related damages. The SBP’s cautious approach aims to navigate these challenges without disrupting financial stability or investor confidence.
