State Bank of Pakistan Holds Policy Rate at 11.5%

The State Bank of Pakistan maintained its benchmark policy rate at 11.5% on Monday, July 27, 2026, for the next six weeks. Governor Jameel Ahmad announced the decision, which aligned with market expectations and follows a previous hold in June. This marks the first policy meeting of the 2026-27 fiscal year.

Governor Ahmad stated that while inflation eased to 11.1% in June and is expected to decline further through September, the bank remains cautious. The central bank cited elevated core inflation and external risks as primary concerns, specifically highlighting that hostilities between the United States and Iran over the Strait of Hormuz threaten to increase energy costs. Other risk factors include the El Niño weather phenomenon and volatile global commodity prices.

Despite these pressures, the bank expects GDP growth for the coming year to range between 3.5% and 4.5%. Ahmad reported that foreign exchange reserves reached approximately $17.3 billion by mid-July, with a year-end target of over $20 billion. To ensure sustainable growth, the bank emphasized the need for fiscal reforms, including broadening the tax base and reducing losses in public sector enterprises. The next policy announcement is scheduled for September 14.