Pakistan raises key rate to 12% as oil above $100 fuels inflation risk
The central bank lifted its policy rate by 50 basis points, its first increase since April. Inflation has been above target for seven straight months.
Symbolic image · Photo: Asim Iftikhar Nagi / Wikimedia Commons, CC BY-SA 4.0 (cropped and resized)
The State Bank of Pakistan raised its benchmark policy rate by 50 basis points to 12% from 11.5%, Trading Economics reported. It was the first increase since April 2026, after rates were held in July and September.
Inflation eased to 10.3% in September from 11.1% in August but has been above the 5%-7% target range for seven consecutive months. Oil prices above $100 a barrel, linked to the Middle East conflict, raise the risk of broader price pressures.
The central bank now forecasts growth of 3.7% for fiscal year 2027, which ends in June 2027.