Pakistan Central Bank Raises Key Interest Rate To 12 Per Cent Amid Inflation Risks And West Asia Conflict
Islamabad, October 26, 2026: Pakistan's central bank on Monday raised the policy rate by 50 basis points to 12 per cent, the first such increase since April. The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) said in a statement that it decided on the measure by a majority vote, with nine out of 10 members supporting it. It cited the intensification of the West Asia conflict…
Islamabad, October 26, 2026: The State Bank of Pakistan raised its key interest rate by 50 basis points to 12 percent on Monday, marking the first increase since April. The Monetary Policy Committee, comprising nine out of ten members, decided to implement the measure amid concerns over inflation risks and the ongoing West Asia conflict.
The decision was made in a statement that cited the intensification of the conflict and low prospects of its near-term resolution as causes for heightened global energy prices. Despite the external account and growth outlook remaining broadly unchanged, the MPC acknowledged increased risks. Governor Jameel Ahmed explained that the re-escalation of the Middle East conflict and domestic wheat supply frictions were major factors that worsened the inflation outlook.
The MPC expects GDP growth to remain within the range of 3.5 percent to 4.5 percent in the fiscal year 2027.
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