SBP holds interest rate at 11% amid signs of recovery and stable inflation

The State Bank of Pakistan (SBP) has decided to maintain the policy interest rate at 11% in its latest monetary policy statement, citing expectations of stabilised inflation and gradual economic recovery. According to the SBP, inflation in May rose by 3.5%, and it is expected to align with the target range in FY26. Despite a consistent rise in the trade deficit, the current account remained nearly balanced in April 2025. The central bank also noted that proposed budgetary measures may further widen the trade gap. Pakistan’s real GDP growth for the current fiscal year has been estimated at 2.7%, while a target of 4.2% has been set for the next fiscal year.