The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) on Monday decided to keep the policy rate unchanged at 11%, in line with market expectations. The official SBP MPC statement will be released shortly as per BRecorder.com.
Interest Rate Decision Aligned with Market Survey
The committee also kept the interest rate at 11% in its final SBP MPC meeting on July 30, 2025, owing to a reduction in the outlook of inflation that will be associated with increased gas tariffs. Analysts predicted the same attitude this time around because the floods in Pakistan are estimated to drive food inflation upwards.
Economic Indicators Since Last MPC
Since the last decision, several key economic indicators have shifted:
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The rupee rally continued with a 0.5% appreciation.
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Petrol prices dropped by 3%, while international oil prices declined nearly 10%, averaging around $63 per barrel.
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Headline inflation eased to 3% year-on-year (YoY) in August 2025, compared with 4.1% in July, as per Pakistan Bureau of Statistics (PBS).
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The current account posted a deficit of $254 million in July 2025, compared with a $328 million surplus in June 2025 and a $350 million deficit in July 2024.
SBP Reserves and External Sector
The SBP reserves in foreign exchange increased by a weekly rate of 34 million, and were at 14.34 billion as of September 5, 2025. Liquid reserves amounted to 19.68 billion and commercial banks had 5.34 billion.
Analysts observed that the fall in oil prices and the recent rise of the rupee are only short-term relief, but floods in Pakistan can increase imports of agriculture and cotton, straining external balances.
