SBP holds rate at 10.5% as oil surge clouds inflation outlook
“Pakistan's central bank has kept the policy rate unchanged as the oil-price spike threatens to complicate the inflation outlook.”
Key points
- Pakistan's central bank has kept the policy rate unchanged as the oil-price spike threatens to complicate the inflation outlook.
- The move signals a more cautious stance despite earlier progress on disinflation.
The State Bank of Pakistan kept its benchmark interest rate unchanged at 10.5%, pausing further easing as policymakers weighed the inflationary risks created by higher global oil prices and instability in the Middle East.
The central bank said the economic outlook had become more uncertain after the regional conflict pushed up fuel prices, freight charges and insurance costs. Officials also warned that the scale and duration of the crisis would be key in determining the impact on Pakistan's domestic economy.
While the bank noted that inflation, reserves and fiscal buffers are in a stronger position than during earlier global shocks, it signalled caution over the months ahead. The decision reflects concern that imported energy costs could again pressure prices and broader macroeconomic stability.
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