State Bank Announces to Keep Interest Rate Fixed at 11%

Karachi: The State Bank of Pakistan has announced to keep the interest rate unchanged.

State Bank Governor Jameel Ahmed, during a news conference, said that the interest rate will remain at 11 percent and work is underway for the improvement of the economy.

He stated that in the last fiscal year, the inflation rate was 4.5 percent, which was slightly below the target set by the government and the State Bank.

He added that there was a significant decrease in the prices of edible items last year, and overall inflation also gradually declined. In June, overall inflation dropped to 7.5 percent, while in the previous June it was 3.2 percent.

Jameel Ahmed said that in April, overall inflation hit a low point of 0.3 percent but started to rise afterward, and in the past two months, overall inflation has increased. In the beginning of the next year, inflation is expected to first decrease and then increase again.

The State Bank Governor said that there have been some minor fluctuations in energy prices, and moving forward, the fundamental effects of this will not be favorable. Considering these factors, the decision was made to keep the interest rate at 11 percent.

He mentioned that the external accounts were carefully reviewed; imports increased significantly in the last fiscal year. Imports in FY 2024 were $53 billion, which rose by 11.1 percent to $59.1 billion in FY 2025.

He said that non-oil imports increased by 16 percent, indicating increased economic activity, with growth in imports in sectors other than oil as well.

Jameel Ahmed said that exports increased slightly over 4 percent last year, which was low and needed to improve to reduce the trade deficit.

The State Bank Governor also said that foreign exchange reserves improved significantly last year, reaching $38.3 billion, compared to approximately $30 billion the previous year, an increase of about $8 billion.

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