ISLAMABAD – Pakistan’s central bank has left its benchmark policy rate unchanged at 11 percent, citing persistent inflation and uncertain global economic conditions. The decision underscores a cautious monetary stance amid efforts to sustain macroeconomic stability.
In its monetary policy statement, the State Bank highlighted that headline inflation remains elevated, necessitating continued restraint. While inflation has slowed over recent months, core price pressures—particularly in food and energy—remain above comfort levels.
The bank also flagged external vulnerabilities, pointing to global uncertainty, potential shocks in commodity and capital markets, and risks posed by stable but tight foreign exchange reserves. Officials stressed that external financing needs must be managed carefully to prevent volatility.
The board emphasised that ongoing fiscal consolidation, structural reform, and improved revenue mobilisation are critical to complementing monetary policy measures. It reaffirmed its commitment to anchor inflation expectations and ensure financial sector resilience.
With interest rates remaining high, borrowing costs for businesses and consumers will be tightly managed, though any material drop in inflation or improvement in external conditions could open the door for future easing.
This story has been reported by PakTribune. All rights reserved.