The State Bank of Pakistan (SBP) kept its policy rate unchanged on Monday at 11 per cent.
The central bank cited persistent inflationary pressures and the economic fallout from recent floods as key factors behind the decision.
“The Monetary Policy Committee decided to keep the policy rate unchanged at 11% in its meeting held on October 27, 2025,” the SBP stated in a post on the social media platform X.
Most analysts had anticipated the decision, noting that the floods in Punjab and Khyber Pakhtunkhwa had severely damaged crops and infrastructure, compounding inflation risks.
The Sensitive Price Index (SPI) rose by 5% week-on-week as of October 23, driven largely by surging food prices. Economists warned that these price shocks are likely to spill over into the broader Consumer Price Index (CPI) in the coming months.
Despite sluggish growth and weak private-sector credit demand, the SBP has refrained from easing monetary policy. Officials fear that any rate cut could worsen inflation, which remains significantly above the real interest rate. Economic challenges persist, with growth stagnating and an estimated 97 million Pakistanis living below the poverty line.
