The State Bank of Pakistan’s Monetary Policy Committee unanimously held the policy rate at 11.5% on July 27, 2026, judging that an improved but still risk-prone macroeconomic outlook, moderating inflation, some pickup in activity and moderate external account pressures left the current stance appropriate to guide inflation back to the 5-7% target range over the medium term; the hold followed a 100 bp increase in April to 11.5%, reversing December 2025’s 50 bp cut to 10.5%. Headline inflation eased to 11.1% in June, with core inflation also moderating, but the committee said inflation is likely to remain above target in the next few months before gradually easing and stabilising near the upper bound by June 2027, while real GDP growth is expected at 3.5-4.5% in FY27 and private sector credit has picked up. On the external side, the current account posted a small deficit in FY26, State Bank of Pakistan foreign exchange reserves stood at around USD 17.3 billion on July 17 after earlier exceeding the end-June target, and reserves are targeted to rise to USD 20.20 billion by end-December 2026. The committee cited renewed Middle East conflict as a key risk after earlier de-escalation had lowered oil prices and eased supply disruptions, and also noted that the International Monetary Fund raised its global inflation forecasts amid higher commodity prices. The central bank reiterated its commitment to price stability and said it will closely monitor incoming data and evolving developm
State Bank of Pakistan2026-07-27
State Bank of Pakistan Holds Policy Rate at 11.5%
The State Bank of Pakistan’s Monetary Policy Committee unanimously kept the policy rate at 11.5% on July 27, 2026, judging that moderating inflation, some pickup in activity and moderate external account pressures left the current stance appropriate to return inflation to the 5% to 7% target range over the medium term. Headline inflation eased to 11.1% in June but is expected to stay above target in coming months before stabilising near the upper bound by June 2027, while the committee flagged renewed Middle East conflict and higher global commodity price risks and said State Bank of Pakistan foreign exchange reserves are targeted to rise to USD 20.20 billion by end-December 2026.