State Bank of Pakistan keeps interest rates unchanged

In a monetary policy decision considered important for Pakistan’s economy, the State Bank of Pakistan has chosen to keep interest rates unchanged, giving a clear signal that it is committed to a prudent monetary strategy while prioritising the current economic stability.

The decision to maintain the policy rate at 11.50 percent was announced after a meeting of the Monetary Policy Committee chaired by State Bank Governor Jamil Ahmed. According to the central bank, the decision was based on the reduction in inflationary pressures in recent months, better performance of the external sector and improvement in financial indicators.

The State Bank says that inflation has come down significantly compared to last year, and this trend is expected to continue in the coming months. However, due to the uncertainty in global markets and the ongoing tension in the Middle East, a prudent monetary policy has been deemed necessary.

The central bank has said in its economic outlook that the current account deficit is expected to remain limited during the fiscal year 2026-27, while exports and remittances from overseas Pakistanis will continue to support the external sector. Officials say that despite the increase in imports, the availability of external financial resources can prove to be a positive factor for the economy.

Governor Jamil Ahmed said that the foreign exchange reserves are expected to reach $20.20 billion by December 2026. He said that in the last few years, the reserves have been strengthened by buying dollars from the interbank market, while Roshan Digital Accounts are also playing a role in continuously bringing foreign capital to Pakistan.

Regarding external debts, he said that Pakistan will have to make payments of $21.5 billion in the current fiscal year; however, a large part of them consists of rollover facilities, which will keep the immediate financial pressure relatively low. According to him, steps are also underway to make debt management more effective.

The State Bank of Pakistan (SBP) expressed cautious optimism about economic activity, saying that the economic growth rate in the current fiscal year could remain between 3.5 and 4.5 percent. According to the central bank, if inflation remains under control, the external sector remains stable and there is no unusual deterioration in global conditions, then Pakistan’s economic recovery process can be further strengthened.

The central bank reiterated its commitment that monetary policy decisions in the future will also be taken, taking into account the full economic data, inflation trends, financial stability and the external sector situation, so that the path of sustainable economic growth with price stability can be paved.