State Bank of Pakistan keeps policy rate unchanged at 11pc
The State Bank of Pakistan (SBP) on Monday announced that it has decided to keep the policy rate steady at 11%, in line with market expectations.
In its previous meeting on July 30, 2025, the MPC also kept the rate unchanged at 11% amid concerns over rising inflation linked to higher-than-expected gas tariffs. This time, analysts widely anticipated a similar decision due to fresh challenges posed by recent floods.
Brokerage houses had predicted the status quo, noting that inflation could climb in the coming months due to damage to crops, food shortages, and supply chain disruptions.
Economic Developments Since July
Several economic indicators have shifted since the last MPC meeting:
- The rupee appreciated by 0.5%.
- Petrol prices dropped 3%, while international oil prices fell nearly 10%, settling around $63 per barrel.
- Inflation eased to 3% YoY in August, down from 4.1% in July, according to Pakistan Bureau of Statistics data.
- In June 2025, the current account recorded a surplus of $328 million, but this turned into a deficit of $254 million in July.
- SBP’s foreign exchange reserves rose by $34 million on a weekly basis, reaching $14.34 billion by September 5, 2025.
- Overall, the country’s total liquid reserves stood at $19.68 billion, with commercial banks holding $5.34 billion.
