Pakistan again holds interest rate at 11pc as floods stoke inflation fears

The State Bank of Pakistan (SBP) maintained its policy rate steady at 11 per cent on Monday for a third straight meeting as policymakers weighed inflation risks from flood-hit crops against a fragile economic recovery. After slashing the interest rate by 1,000 basis points (bps) from 22pc since June 2024 in seven intervals, the central bank has maintained it at 11pc since May. However, the business community had expressed disappointment over the decision. “The Monetary Policy Committee (MPC) decided to keep the policy rate unchanged at 11 per cent in its meeting today,” an SBP statement said. The MPC noted that inflation remained “relatively moderate in both July and August, whereas core inflation continued to decline at a slower pace”.