The State Bank of Pakistan (SBP) announced on Monday that the Monetary Policy Committee has kept the interest rate unchanged at 11 percent in its meeting held on October 27, 2025, citing a pickup in economic activity and an improved macroeconomic outlook despite a recent surge in headline inflation.
In its Monetary Policy Committee (MPC) statement, the central bank noted that inflation rose to 5.6% in September from 3% a month earlier, driven by flood-related food price pressures and higher energy costs. Core inflation, however, held steady at 7.3%. The MPC said the decision to maintain rates would help preserve price stability while allowing the impact of earlier rate cuts to unfold.
The SBP said Pakistan’s economy showed stronger momentum than previously expected, with large-scale manufacturing expanding by 4.4% in July-August, and agriculture output largely spared from severe flood damage. Real GDP growth for fiscal year 2025 was revised up to 3% from 2.7%, and the central bank now expects growth to settle in the upper half of its earlier 3.25%–4.25% range.
The external position also showed resilience. The current account recorded a $110 million surplus in September, bringing the deficit for the first quarter of FY26 to $594 million. Foreign exchange reserves rose to $14.5 billion as of mid-October and are projected to reach $17.8 billion by June 2026, aided by continued inflows and a contained current account gap.
On the fiscal side, tax revenues rose 12.5% year-on-year to Rs. 2.9 trillion in the first quarter but missed the target by Rs. 198 billion. The central bank emphasized the need for fiscal discipline to meet balance targets and ensure sustainability amid rising rehabilitation spending after recent floods.
The SBP highlighted easing inflation expectations and a stable external environment following Pakistan’s staff-level agreement with the International Monetary Fund on Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) reviews.
Looking ahead, the central bank expects inflation to remain above its 5-7% target range for several months in the second half of FY26 before easing within r
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They should be increased . Inflation is all time high
Prices are all time high.
Why are interest rates at 11% ? They should be at 15%
This is open enimity to the nation and its people by state bank.
Obviously is totally against commands of Allah and his prophet pbuh.
Developed economies have less than five percent interest rates and still lowering it.
Knowing that lowering of interest rates will lower debt burden upon nation.
Lowering of interest rates will make money available to business comunity to produce things upon comparative rates.
Lowering interest rates will move economy and enhance production and will lower inflation.
It will make cruncy strong
It will also bost emplyment
More emplyment means higher living standard and low crimes.
All this and other good factors shows present administration of state bank is not taking decissions in favour of the nation there administration of state bank must be changed bring good people who understands how to move economy, to create more business activity more jobs more production and less inflation and less crimes.
Allah knows best
Alhamdolilah