LAHORE MIRROR — The State Bank of Pakistan (SBP) has announced the new monetary policy, keeping the interest rate unchanged at 11%.
According to a press release, a meeting of the State Bank’s Monetary Policy Committee (MPC) was held under the chairmanship of Governor State Bank Jameel Ahmed, during which the new monetary policy was announced.
According to the press release issued by the central bank, the Monetary Policy Committee decided in today’s meeting to maintain the policy rate at 11%. The committee noted that the inflation rate in June 2025 decreased year-on-year to 3.2%, due to a decline in basic food prices, while core inflation also saw some reduction.
The statement said that the committee noted that changes in energy prices, particularly gas rates, more than expected, have somewhat worsened the inflation outlook. However, it is expected that in the future, inflation will stabilize within the target range.
Furthermore, economic activity is picking up pace, while the effects of the previous cut in the policy rate are still unfolding. According to the statement, the Monetary Policy Committee expected that the trade deficit will further widen in the fiscal year 2026, due to increased economic activity and sluggishness in global trade.
Given this macroeconomic scenario and emerging risks, the Monetary Policy Committee considered today’s decision necessary to ensure price stability.
According to the State Bank, since the last meeting of the committee, the developments are as follows:
Firstly, the central bank’s foreign exchange reserves have exceeded 14 billion dollars due to improved inflows and a current account surplus.
Secondly, the recent improvement in Pakistan’s sovereign credit rating led to a decrease in Eurobond yields and a reduction in CDS spreads in international markets.
Thirdly, in a recent survey, consumers showed a slight increase in inflation expectations, while businesses expressed expectations of a decline in inflation.
Fourthly, in the fiscal year 2025, FBR’s tax revenues stood at 11.7 trillion rupees, which is about 200 billion rupees less than the revised estimate. Lastly, global oil prices remained volatile, while metal prices increased. Meanwhile, the impact of global trade tariffs remained uncertain, due to which central banks continued a cautious monetary policy stance.
The statement said that in view of these developments and potential risks, the committee analyzed that in order to stabilize inflation within the target of 5 to 7 percent, the real policy rate should remain appropriately positive. The committee emphasized the need to continue a cautious mix of monetary and fiscal policy to maintain economic stability.
