The State Bank of Pakistan (SBP) on Monday kept its benchmark policy rate unchanged at 11.5 percent.
This is the third consecutive meeting in which the central bank has maintained the policy rate at the same level following the Monetary Policy Committee’s June 15, 2026 meeting.
The next meeting of the Monetary Policy Committee is scheduled for October 26, 2026.
The State Bank of Pakistan (SBP) has kept the policy rate unchanged at 11.5 percent, with seven out of 10 members of the Monetary Policy Committee (MPC) voting to maintain the current rate.
The MPC said the escalation of the Middle East conflict has pushed global commodity prices higher and continued to disrupt supply chains. However, domestic economic conditions have remained broadly in line with its expectations.
Inflation increased to 11.1 percent in August from 9.2 percent in July, while core inflation remained slightly below expectations. External sector pressures also remained under control due to strong workers’ remittances and increased financial inflows.
Economic activity has started recovering after slowing in the fourth quarter of FY26. Recent indicators, including fuel sales, private sector borrowing, textile exports and business sentiment, point to a gradual improvement.
The MPC said the existing monetary policy stance is suitable for bringing inflation toward the 5-7 percent target range over the medium term. However, it warned that risks to the outlook have increased due to geopolitical developments.
The committee noted that Moody’s recently upgraded Pakistan’s sovereign credit rating to B3 with a stable outlook. Pakistan also raised $3 billion through Eurobond issuance, while foreign exchange purchases helped lift SBP reserves to $21.4 billion.
The MPC expects economic growth to remain between 3.5 and 4.5 percent during FY27. It also expects strong remittances and higher ICT exports to keep the current account deficit between 0 and 1 percent of GDP.
On the fiscal side, consolidation during FY26 was stronger than the budget target. FBR tax collection remained in line with its target during July-August FY27, while the SBP transferred Rs. 1.9 trillion in profit to the government against a budget estimate of Rs. 1.4 trillion.
The MPC said inflation is expected to gradually move toward the upper end of the 5-7 percent target range by June 2027. However, risks remain from global commodity prices, energy tariff adjustments, supply disruptions and food prices.
The committee stressed the need for a prudent monetary and fiscal policy mix, stronger economic buffers and faster structural reforms to support sustainable growth.
