The State Bank of Pakistan (SBP) has kept its benchmark policy rate unchanged at 11.5 percent for the third consecutive Monetary Policy Committee meeting, even as headline inflation ticked upward in August.
The Decision
This marks the third straight meeting in which the rate has remained steady, following the previous session held on June 15, 2026. The Monetary Policy Committee said that “the current monetary policy stance remains appropriate to bring inflation toward the 5-7 percent target range over the medium term,” signaling the central bank’s intent to hold steady rather than adjust rates in either direction for now.
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Inflation Trends
Headline inflation rose to 11.1 percent year-on-year in August, up from 9.2 percent in July, while core inflation stood at 8.7 percent. The Committee attributed the August uptick primarily to elevated food prices, particularly for wheat and related products, along with higher energy costs weighing on the broader inflation basket.
Beyond domestic price pressures, the MPC also pointed to increased uncertainty stemming from geopolitical tensions in the Middle East, which it said have elevated global commodity prices and disrupted supply chains. These external factors add a layer of complexity to the central bank’s efforts to steer inflation back toward its medium-term target range.
What Comes Next
The Monetary Policy Committee is scheduled to reconvene on October 26, 2026, when it will reassess the rate decision in light of updated inflation data and economic conditions. Given the current trajectory, with inflation moving further from the target range rather than closer to it, analysts and businesses will be watching closely to see whether the SBP maintains its holding pattern or signals a shift at the next meeting.
For more on related developments, see our coverage of the FIA’s probe into the Rs. 172 billion call centre scam and the Rs. 1 trillion in tribal area imports diverted.
