The State Bank of Pakistan’s Monetary Policy Committee held the policy rate at 11.5%, with seven of 10 members supporting the decision, judging the stance appropriate to guide inflation toward target despite increased geopolitical uncertainty and a gradual pickup in activity. Over the past year, the rate was held at 11% in September-October 2025, cut by 50 basis points in December, held through March 2026, raised by 100 basis points in April and held thereafter. Headline inflation rose to 11.1% year on year in August, driven largely by food and energy prices, but is expected to ease toward the upper bound of the 5-7% target range by June 2027, while real GDP growth is projected at 3.5-4.5% in FY27 and private-sector credit growth remains broad-based. External pressures stayed contained as robust remittances, financial inflows and foreign exchange purchases lifted reserves to USD 21.4 billion. The prolonged Middle East conflict has increased global commodity prices and sustained supply-chain disruptions, raising risks to the outlook. The committee said it would closely monitor incoming data and developments in the Middle East, while stressing prudent monetary and fiscal policies, stronger buffers and timely structural reforms.
2026-09-14State Bank of Pakistan
State Bank of Pakistan Holds Policy Rate at 11.5%
The State Bank of Pakistan’s Monetary Policy Committee held the policy rate at 11.5%, with seven of 10 members supporting the decision as appropriate to guide inflation toward the 5-7% target range. Headline inflation reached 11.1% in August, while the prolonged Middle East conflict and higher global commodity prices have increased risks to the outlook.