MPC Holds Steady at 11% as Economic Uncertainties Loom

Karachi: The State Bank of Pakistan (SBP) has decided to maintain its policy rate at 11%, citing uncertainties in global commodity prices, export challenges due to shifting tariff dynamics, and potential domestic food supply issues.

The Monetary Policy Committee (MPC) emphasized the importance of strengthening external and fiscal buffers to manage potential economic shocks. This approach aims to support the ongoing economic recovery while maintaining balanced monetary and fiscal policies. The committee also called for advancing structural reforms to ensure growth without exacerbating inflationary or external pressures.

Looking ahead, the SBP anticipates an increase in foreign exchange reserves and expects workers’ remittances to surpass $40 billion by the fiscal year 2026. External financing needs for FY26 are projected to remain similar to those of the previous year.

These measures, according to the SBP, are crucial to navigating the current economic landscape and ensuring sustainable growth in the long term.