KARACHI – State Bank of Pakistan (SBP) kept policy rate unchanged at 11.5%, as policymakers adopted a cautious stance in view of inflationary pressures, fiscal challenges and evolving global developments.
The decision was announced after fourth meeting of the Monetary Policy Committee (MPC) this year. The central bank said it would continue assessing the impact of earlier monetary tightening measures before making further adjustments to interest rates.
The latest decision comes after central bank raised the policy rate by 100 basis points in its previous MPC meeting on April 27, 2026, taking the benchmark rate to 11.5% in line with market expectations.
Uncertainty over the policy outlook was mainly driven by volatility in international oil prices and geopolitical tensions.
Pakistan Institute of Development Economics (PIDE) also said market expectations broadly favored a cautious hold, although views remained split between maintaining rates and a modest increase.
Easing pressure from oil prices and improving geopolitical conditions had reduced the likelihood of another rate hike. However, it added that persistent inflationary risks and concerns over inflation expectations made a rate cut unlikely at this stage.
SBP is expected to continue closely monitoring inflation trends, fiscal discipline and external account performance in determining its future policy stance.
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