On Monday, September 15, 2025, the State Bank of Pakistan (SBP) announced it will keep its policy rate at 11%. The decision, made by the Monetary Policy Committee (MPC) led by the SBP Governor, comes as the country faces severe floods. A detailed statement will follow, the SBP said on its website.
Economic experts predicted the SBP would hold the rate steady due to the flood crisis. Inflation was 3% in August 2025, and the current account deficit was $240 million in July. Despite stable inflation, the floods’ impact on agriculture and infrastructure limits room for a rate cut. The MPC believes the 11% rate helps keep inflation within the 5-7% target range.
In June 2025, the SBP also kept the rate at 11%. Inflation rose to 3.5% in May, as expected, while core inflation slightly dropped. The MPC noted rising global oil prices due to Middle East tensions and easing US-China trade issues. The current rate is seen as positive enough to stabilise the economy.
Read: State Bank of Pakistan Plans Digital Currency with Strict Rules
The ongoing floods have destroyed crops and homes, raising fears of food price spikes. Experts estimate the economic damage could cut growth by up to 0.2%. The SBP’s decision reflects a cautious approach, balancing inflation risks with the need to support a struggling economy.
The SBP’s choice to maintain the interest rate affects businesses, farmers, and families impacted by floods. Stable rates aim to control inflation but may limit economic relief. This decision shows the challenge of managing crises while keeping Pakistan’s economy steady.
The State Bank of Pakistan’s decision to keep the interest rate at 11% on September 15, 2025, prioritises stability amid floods. As the country faces economic challenges, this move shapes recovery efforts.
