In its first meeting of 2026, the State Bank of Pakistan’s (SBP) Monetary Policy Committee decided to keep the policy rate unchanged at 10.5 percent.
The committee considered a range of factors in reaching the decision, including rising food prices and other key economic indicators. Officials noted that the country’s foreign exchange reserves are showing signs of improvement, providing some stability to the economy.
In addition to discussing external economic conditions, the committee also addressed internal financial and structural issues to ensure a balanced approach to monetary policy.
The decision reflects the SBP’s cautious stance amid ongoing inflationary pressures while aiming to support economic stability.
Earlier, it was reported that the State Bank was scheduled to announce its new monetary policy today following a meeting of its Monetary Policy Committee (MPC) at the central bank’s headquarters in Karachi.
Meanwhile, market participants widely expected the SBP to lower the policy rate by 50 to 100 basis points.
In its last policy review of 2025, the central bank had cut the rate by 50 basis points to bring it down to the current level. Since then, recent economic and financial indicators have strengthened expectations of a more decisive move.
Treasury bill auctions, in particular, have reflected a sharp decline in government borrowing costs, with yields falling into single digits for the first time in four years - a development seen by analysts as a strong signal that further monetary easing may be imminent.
