State Bank of Pakistan Keeps Policy Rate Unchanged at 22% for Fifth Straight Meeting

In its latest meeting, the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) has opted to maintain the policy rate at 22%, marking the fifth consecutive meeting without any changes.

This decision aligns with market expectations, as the majority of market participants anticipated a pause in the rate.

The committee highlighted that the frequent adjustments in administered energy prices have hindered the expected decline in inflation, counteracting efforts for sustained decreases in inflation expectations.

Nonetheless, non-energy inflation is showing signs of moderation, consistent with the committee's projections.

Despite the positive developments such as improved foreign exchange reserves, fiscal consolidation, and favorable business sentiments, escalating geopolitical tensions in the Red Sea region are posing risks to global trade and commodity prices.

Considering these factors and persistent inflation levels, the MPC emphasizes the importance of maintaining a tight monetary policy stance, along with continued fiscal consolidation and timely external inflows, to achieve the inflation target of 5-7% by September 2025.