SBP Maintains Policy Rate at 12% Amid Economic Uncertainty
Islamabad, March 10, 2025 – The State Bank of Pakistan (SBP) has decided to keep its key policy rate unchanged at 12%, signaling a cautious approach despite a notable decline in inflation.
The Monetary Policy Committee (MPC) cited concerns over potential inflationary pressures, particularly in food and energy prices, as a key reason for maintaining the current rate. Although inflation dropped to 1.5% in February 2025—the lowest in nearly a decade—the central bank remains wary of external economic challenges.
Economic indicators suggest a gradual recovery, but the external account deficit, which reached $0.4 billion in January after months of surplus, has raised concerns. Rising imports and weaker financial inflows have further complicated the situation.
Reactions from the business community have been mixed. While the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has called for a rate cut to boost economic activity, the Pakistan Business Council (PBC) has supported the SBP’s decision, emphasizing the importance of stability.
The SBP’s decision reflects a careful balance between fostering economic growth and controlling potential risks, as the country navigates an evolving financial landscape.