The State Bank of Pakistan (SBP) has announced its monetary policy and has decided to maintain the base interest rate at 11 percent.
The Monetary Policy Committee meeting chaired by State Bank Governor Jamil Ahmed decided to maintain the interest rate at 11 percent.
It should be noted that State Bank Governor Jamil Ahmed had already indicated that there is no possibility of a reduction in interest rate, as the uncertain situation regarding inflation and the ongoing negotiations with the International Monetary Fund (IMF) may affect this decision.
According to a report published in Dawn newspaper, in an interview with the American magazine ‘Bloomberg’, the Governor of the State Bank had said that any change in the policy rate would depend on the outcome of the IMF negotiations and the economic impact of the recent floods.
Jamil Ahmed had said that inflation could temporarily exceed the SBP’s medium-term target of 5-7% in early 2026, but is expected to remain in the same range on average during the current and next fiscal year.
Analysts and independent economists had also ruled out the possibility of a rate cut, as the recent rise in inflation and the central bank’s cautious approach prioritized overall economic stability over short-term growth. Inflation had risen to 5.6% from 3% in September, a major reason for which was the disruption caused by the floods.
