State Bank of Pakistan keeps policy rate at 11.5 percent

Committee vote and inflation data

Seven out of ten members voted for the status quo decision. Headline inflation rose to 11.1 percent in August compared to 9.2 percent in July. Core inflation figures came in slightly lower than what the committee expected.

Global pressures and domestic activity

The committee noted that Middle East conflict tensions increased global commodity prices. Supply chain disruptions have persisted alongside these external price increases. Recent high-frequency indicators show economic activity picking up after a slowdown in the fourth quarter of fiscal year 2026.

External accounts and future outlook

External account pressures remained contained due to robust workers remittances and higher financial inflows. The committee assessed that the current stance guides inflation toward a 5-7 percent target range over the medium term. Uncertainty regarding the outlook has increased because of the worsening geopolitical environment.