The State Bank of Pakistan kept its benchmark policy rate unchanged at 10.5 percent on Monday. The move aims to contain inflation risks and maintain economic stability. Businesses, investors, and borrowers across Pakistan will be directly affected by the decision.
The decision was taken during the Monetary Policy Committee meeting chaired by SBP Governor Jameel Ahmad. Analysts had widely expected the central bank to maintain the rate. Rising geopolitical tensions linked to the Middle East conflict have increased uncertainty for global markets and energy prices.
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In its policy statement, the committee said incoming economic data broadly matched projections shared after the January meeting. However, the ongoing conflict has pushed global fuel prices higher. Freight and insurance costs have also increased, affecting trade and travel across regions.
The committee highlighted several domestic economic developments shaping the outlook. Inflation rose to 5.8 percent in January and seven percent in February. Meanwhile, the current account posted a $121 million surplus in January. Foreign exchange reserves reached $16.3 billion by February 27, reflecting continued central bank purchases.
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Officials also noted moderate economic activity supported by growth in manufacturing, exports, and remittances. However, tax collection by the Federal Board of Revenue remained below targets during recent months. The committee stressed structural reforms and prudent fiscal policies to ensure sustainable economic growth.