KARACHI: The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) on Monday decided to maintain the key policy rate at 10.5 percent.
In a brief statement issued on its website, the central bank said, “The Monetary Policy Committee has decided to keep the policy rate unchanged at 10.5%,” adding that a detailed monetary policy statement will be released shortly.
The SBP has already reduced the benchmark interest rate by a total of 1,150 basis points since mid-2024, bringing it down from the historic high of 22 percent recorded in 2023, as inflation eased significantly from multi-decade peaks.
However, rising tensions in the Middle East have increased fears of disruptions to global oil shipments through the Strait of Hormuz, a vital route for international energy supplies. The uncertainty has pushed global energy prices upward.
Pakistan, which relies heavily on imported fuel, remains highly vulnerable to fluctuations in global oil prices, making domestic inflation sensitive to changes in the international energy market.
Amid the surge in oil prices linked to the conflict involving Iran, the federal government increased retail fuel prices by nearly 20 percent. The price of petrol was raised from Rs266.17 to Rs321.17 per litre, while diesel climbed from Rs280.86 to Rs335.86 per litre.
