The State Bank of Pakistan (SBP) maintained its stable policy rate at 11 percent on Monday for a third consecutive meeting, since policies formulators shed the inflation risks of crops affected by floods against a fragile economic recovery.
After reducing the interest rate by 1,000bps from 22 percent since June 2024 in seven intervals, the Central Bank has maintained it at 11PC since May. However, the business community had expressed its intense disappointment for the decision.
“The monetary policy committee decided to maintain the policy rate without changes in 11 percent at its meeting held on September 15, 2025,” said the SBP on its website, adding that a detailed statement will be published shortly.
After falling below the brand of 155,000 points on Friday, the Pakistan Stock Exchange saw signs of recovery before today’s meeting, since it won 1,138.1 points at 10:24 am to reach 155,577.78.
The PSX fluctuated during the day, falling as low as 154,486.21 points, before increasing to 155,452.89 at 3:14 pm after the MPC announcement.
Floods in the country, which have caused estimated losses in billions of rupees due to damage to crops and land, have added pressure to inflation, particularly in agriculture products. There has been a significant increase in prices for items such as rice and vegetables.
The interested parties of the business have expressed divergent views on the impact of floods on supply chains, and some cite delays in the interprovincial movement of the load and the damage of the crops, while others insisted on food, fuel and medications supplies remain normal.
Last month, the Minister of Finance, Muhammad Aurengzeb, said there was a “room” to reduce the policy rate by the end of this year, but emphasized that it was the scope of the SBP and its MPC.
A recent survey conducted by the Chartered Financial Analyst Institute (CFA) revealed that 92 % of respondents expected the interest rate to remain unchanged, despite the fact that commercial and industrial groups requested more cuts to stimulate economic activity.
The MPC had maintained the stable rate at its last meeting in July, citing possible risks of inflation of the increase in energy prices and geopolitical tensions, despite the fact that inflation had been moderate.
More to follow
