SBP Keeps Policy Rate Unchanged Amid Inflation Surge

In its latest monetary policy statement, the Monetary Policy Committee (MPC) noted that headline inflation moved into double digits during April and May, while core inflation also showed an upward trend. The committee added that economic activity has begun to slow as higher prices, fiscal tightening measures, and prevailing uncertainty weigh on growth prospects.

SBP Policy Rate Unchanged at 11.5% in June 2026

The MPC highlighted that international oil prices have declined following recent positive geopolitical developments but remain above levels seen before the recent conflict. After reviewing domestic and global economic conditions, the committee concluded that maintaining the current interest rate is the most appropriate course to steer inflation towards the desired range of 5% to 7% over the medium term.

According to the SBP, Pakistan’s economy is estimated to have expanded by 3.7% in FY2025-26, up from 3.2% a year earlier. Growth was supported mainly by the services and industrial sectors, while agriculture also contributed positively. However, the central bank cautioned that the Middle East conflict, fiscal austerity measures, and uncertainty could slow economic momentum, with additional risks stemming from weaker agricultural output and adverse weather conditions in FY2026-27.