State Bank of Pakistan (SBP) announced to keep benchmark interest rate unchanged at 11pc, as inflation trends and economic recovery remain broadly aligned with projections.
The decision was made during a scheduled meeting of the State Bank of Pakistan’s Monetary Policy Committee (MPC), which observed that inflation in May rose to 3.5% year-on-year, matching expectations, while core inflation showed a slight decrease.
According to the MPC's official statement, inflation is expected to rise slightly in the short term but stay within the target range for the 2025–26 fiscal year.
The committee pointed to early signs of an economic recovery, which is likely to gain momentum over the next year due to the delayed effects of previous interest rate cuts. However, it also expressed concern about growing risks to the external sector.
The MPC noted that a widening trade deficit and slow financial inflows could create challenges. It also cautioned that some of the budget proposals for the upcoming fiscal year might increase import demand, putting additional pressure on the trade balance.
Due to these factors, the committee stressed the need to keep the current policy rate unchanged in order to maintain economic and price stability in the coming months.
The next monetary policy meeting is scheduled for August 2025, when the committee will review the economic situation again.
