State Bank of Pakistan Holds Policy Rate at 11%
SBP keeps interest rate unchanged at 11% to balance inflation control and economic growth amid ongoing financial and global market risks.
The State Bank of Pakistan (SBP) has decided to keep the policy rate unchanged at 11 percent, signaling a cautious approach to managing inflation and supporting economic stability. The decision came after the latest meeting of the Monetary Policy Committee (MPC), which assessed current economic trends, inflation outlook, and global financial conditions.
According to the central bank, the current interest rate level is appropriate to control inflation without harming fragile economic growth. Officials stated that recent data shows a slight improvement in inflation, but it is still too early to begin cutting rates.
The bank acknowledged that while core inflation has started to ease, uncertainties in global oil prices, import costs, and fiscal pressures continue to pose risks. Therefore, a steady policy rate is seen as the best option to maintain macroeconomic balance.
Analysts had mixed expectations before the announcement, with some hoping for a small rate cut to encourage investment and boost business activity. However, most agreed that keeping the rate unchanged reflects a responsible move to avoid further price instability.
The SBP also noted that foreign exchange reserves have slightly improved and the rupee has shown some stability, supported by better current account management and inflows from external partners. Still, the bank remains cautious due to external vulnerabilities and uncertainty in the global economy.
Economists believe the central bank is trying to strike a balance between controlling inflationary pressures and creating a stable environment for future growth. They say that any move in rates ahead will depend on how inflation and key economic indicators perform over the next few months.
The next policy review will depend on further data and international market developments, but for now, the central bank has opted for a wait-and-see strategy. Businesses, investors, and consumers will be closely watching inflation numbers and exchange rate movements for any signs of change.
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