ISLAMABAD: The State Bank of Pakistan’s (SBP) Monetary Policy Committee (MPC) on Monday decided to maintain the key policy rate at 11.5 percent.
The committee met for the sixth time this calendar year, with its decision in line with market expectations.
The SBP has kept the policy rate unchanged since raising it by 100 basis points in April — its first rate hike in nearly three years. The increase followed a surprise 50bps cut in December 2025 and rate holds in January and March.
In its statement, the MPC said that the status quo was a majority decision taken by seven out of ten members.
The Committee noted that the recent intensification of the prolonged Middle East conflict has led to a further increase in already elevated global commodity prices, while supply chain disruptions have persisted.
However, recent domestic macroeconomic data turned out broadly in line with the MPC’s expectations. Headline inflation increased to 11.1 percent y/y in August from 9.2 percent in July, while core inflation was slightly lower than expectations. External account pressures remained contained, supported by robust workers’ remittances and higher financial inflows.
The Monetary Policy Committee (MPC) decided to keep the policy rate unchanged at 11.5% in its meeting held on September 14, 2026, with the majority decision of seven out of ten members.
For details: https://t.co/V5zzulT4Ll#SBPMonetaryPolicy pic.twitter.com/bbFI6OG00B— SBP (@StateBank_Pak) September 14, 2026
Meanwhile, economic activity, after witnessing a slowdown in Q4-FY26, started to pick up gradually, as reflected by recent high-frequency indicators.
“In this context, the MPC assessed that the current monetary policy stance remains appropriate to guide inflation towards the target range of 5-7% over the medium term. However, uncertainty regarding the outlook has increased, particularly from the worsening geopolitical environment,” the MPC said in its statement.
Middle East situation
The central bank said that it continues to closely monitor incoming data and the ongoing situation in the Middle East.
The Committee also noted that shocks such as adverse geopolitical events and weather-related disruptions have become more frequent and continue to pose risks to the macroeconomic outlook.
Against this backdrop, the MPC emphasised the need to maintain a prudent monetary and fiscal policy mix and further build up buffers to absorb supply shocks.
This, along with timely implementation of structural reforms, is essential to enhance resilience, raise productivity, and support higher and sustainable growth.
Previous MPC meeting
At its previous meeting on July 27, the MPC kept the policy rate unchanged at 11.5%, despite signs of improvement in Pakistan’s macroeconomic outlook. The MPC cited heightened external risks stemming from the renewed conflict in the Middle East.
At the time, the committee said the prevailing monetary policy stance remained appropriate to steer inflation towards its medium-term target range of 5% to 7%.
Earlier, a number of analysts expected the SBP to maintain the status quo, as mounting inflationary pressures from elevated global oil prices could limit the scope for monetary easing.
