Mazaj News (Web Desk): The State Bank of Pakistan (SBP) has increased its benchmark policy rate by 100 basis points to 11.5% on Monday, taking a cautious stance amid rising concerns over oil price fluctuations and renewed inflationary pressures affecting the economic outlook.
The decision followed a closely contested meeting of the Monetary Policy Committee. According to a Reuters poll, six out of ten economists had expected the rate to remain unchanged at 10.5%, while three predicted a 50-basis-point hike and one anticipated a larger 100-basis-point increase.
Inflation in Pakistan rose to 7.3% year-on-year in March, up from 7% in February, moving beyond the SBP’s target range of 5% to 7%. Some analysts have cautioned that inflation could approach double-digit levels in the fourth quarter of the fiscal year if external risks continue.
Global oil prices have stayed unstable due to tensions in the Iran–US situation, adding pressure on international markets and increasing worries about Pakistan’s import costs.
Since June 2024, when the policy rate peaked at 22%, the SBP has reduced rates by a total of 1,150 basis points. The central bank had last cut the rate by 50 basis points in January.