Monetary policy today

The State Bank of Pakistan (SBP) is widely expected to leave its benchmark policy rate unchanged at 11.5% in its monetary policy announcement on Monday, as policymakers weigh persistent geopolitical risks against improving domestic economic indicators.

 

The Monetary Policy Committee (MPC), chaired by Governor Jameel Ahmad, will assess the latest economic conditions before deciding on the policy rate. The benchmark rate has remained at 11.5% since April, when the SBP raised it by 100 basis points in response to heightened risks stemming from tensions in the Middle East. The Committee also maintained the rate at its June meeting.

 

Analysts expect the central bank to adopt a cautious stance amid renewed geopolitical uncertainty and volatility in global oil prices. According to a Topline Securities survey, 97% of respondents anticipate no change in the policy rate, while only 3% expect a 100-basis-point cut.

 

Pakistan's macroeconomic indicators have shown signs of improvement. The country recorded a current account deficit of USD 136 million in FY26, remaining within the SBP’s projected range despite higher imports linked to stronger economic activity. The central bank also achieved its target of maintaining foreign exchange reserves at USD 18 billion by the end of June 2026.

 

Meanwhile, workers’ remittances reached a record USD 41.6 billion during FY26, providing significant support to the external account. Inflation stood at 11.1% in June, while average inflation for FY26 was approximately 7.05%, close to the SBP’s target range of 5–7%. Governor Jameel Ahmad has expressed confidence that inflation will continue to ease in