The State Bank of Pakistan (SBP) has kept its policy rate unchanged at 11%, in line with market expectations. The decision was made during the Monetary Policy Committee (MPC) meeting held on Monday. SBP said that the full MPC statement would be released shortly.
This marks the second consecutive meeting where the rate has been held steady. In July, the MPC also kept the rate unchanged, citing a worsening inflation outlook due to unexpected increases in energy prices, especially gas. Analysts had widely predicted a pause in rate changes again this month.
A recent Topline Securities survey showed that 72% of market participants expected no rate change, mainly due to the inflationary impact of floods damaging crops and disrupting supply chains. Arif Habib Limited also expected a cautious approach, highlighting potential risks to the current account and rising food inflation.
Despite recent improvements in some areas — such as a 0.5% gain in the rupee and a 3% drop in petrol prices — economic risks remain. Global oil prices have also fallen by nearly 10%, easing external pressure. However, flood-related imports of food and cotton may add pressure in the coming months.
Pakistan’s headline inflation eased to 3% in August, down from 4.1% in July. The current account posted a $254 million deficit in July, compared to a surplus in June. Meanwhile, SBP reserves rose to $14.34 billion, with total liquid reserves reaching $19.68 billion. Analysts say the central bank may wait for further data before adjusting rates.