The State Bank of Pakistan’s Monetary Policy Committee announced on March 9, 2026, that the key interest rate will remain at 10.5%.
The decision was disclosed on the SBP’s website, with a detailed statement expected soon. Since mid-2024, the SBP has reduced the rate by 1,150 basis points, down from a record 22% in 2023, as inflation significantly declined from previous highs.
However, escalating tensions in the Middle East have raised concerns about potential disruptions in the Strait of Hormuz, a critical route for global oil supplies, causing energy prices to surge.
Pakistan, largely dependent on energy imports, recently increased consumer prices for diesel and petrol by approximately 20% due to the conflict in Iran.
Governor Jameel Ahmad has expressed optimism, predicting economic growth between 3.75% and 4.75% in FY26, driven by robust domestic demand and prior monetary easing. Nevertheless, inflation might temporarily exceed the central bank’s target range of 5% to 7% this year before stabilizing.
Pakistan continues its $7 billion IMF program, with the IMF advising policymakers to maintain a cautious and data-driven monetary policy to manage inflation expectations and bolster external financial buffers.
Published in SouthAsianDesk, March 9, 2026
Follow SouthAsianDesk on X, Instagram and Facebook for insights on business and current affairs from across South Asia.
