{
  "id": 16681784,
  "title": "Policy rate up 50bps to 12pc on rising risks",
  "url": "https://urgent.news/2026/10/26/policy-rate-up-50bps-to-12pc-on-rising-risks",
  "topic": "business",
  "section": "Business",
  "published": "2026-10-26T23:30:25.000Z",
  "source": {
    "name": "Business Recorder",
    "slug": "business-recorder",
    "url": "https://www.brecorder.com/news/40446079/policy-rate-up-50bps-to-12pc-on-rising-risks"
  },
  "original_language": "en",
  "account": "Karachi: On Monday, the State Bank of Pakistan's Monetary Policy Committee (MPC) decided to raise its key policy rate by 50 basis points to 12 percent, in accordance with market forecasts. This move came following escalating geopolitical tensions that have impacted inflation expectations and raised risks to the economy and external accounts. SBP Governor Jameel Ahmed revealed the MPC's decision during a press conference, noting that nine out of the 10 committee members agreed to the hike. The cumulative increase in the policy rate for this year now stands at 150 basis points, taking it from 10.5 percent to 12 percent. This follows a 100 bps hike in April 2026, driven by the Middle East conflict's impact on energy prices, which has further fueled inflationary pressures within the economy. The MPC anticipates real GDP growth to stay within the previously projected range of 3.5 to 4.5 percent for FY27. However, they caution that this projection is vulnerable to heightened risks originating from the ongoing Middle East conflict's escalation and adverse weather events due to worsening El Niño conditions. The Committee highlighted that while high energy and wheat prices, along with related product costs, have significantly contributed to the rise in headline inflation to 10.3 percent year-on-year in September, surpassing their expectations. However, core inflation remains steady at around 8.4 percent. The MPC observed that while economic activity has exhibited a gradual recovery, with 1.9 percent LSM output growth in July-August FY27 compared to 0.4 percent in Q4-FY26, factors such as geopolitical tensions and fluctuating global commodity prices continue to pose challenges. The monetary policy statement emphasized the importance of sustained efforts to strengthen fiscal discipline, boost revenue through tax base expansion, and accelerate structural reforms.",
  "summary": "KARACHI: The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) on Monday raised its key policy rate by 50 basis points (bps) to 12 percent, in line with market expectations, as worsening geopolitical developments clouded the inflation outlook and heightened risks to the external account and economic growth. Addressing a press conference after the meeting, SBP Governor Jameel…",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}