The State Bank of Pakistan (SBP) on Monday decided to keep the benchmark interest rate unchanged at 11% for the next two months.

The decision was made during the second meeting of the Monetary Policy Committee (MPC), held on Monday under the chairmanship of SBP Governor Jameel Ahmad.

The committee reviewed both domestic and global economic conditions before reaching its decision.

Agricultural losses

According to economic experts, recent floods have caused widespread damage to the agricultural sector, destroying major crops.

As a result, Pakistan may be forced to import essential commodities to meet domestic demand — a move that could widen the import bill and trigger further inflation.

Given these challenges, the SBP opted to maintain the current interest rate to help stabilise the economy.

This marks the third consecutive time the central bank has held the policy rate at 11%.

The SBP noted that maintaining the rate will provide necessary support to the economy while keeping inflationary pressures in check.

A recent survey revealed that 92% of respondents anticipated no change in Pakistan’s interest rate.

The previous meeting of the Monetary Policy Committee (MPC) was held on July 30, during which the committee also chose to keep the policy rate unchanged, citing rising energy costs — particularly gas tariffs — as key inflationary pressures influencing the decision.

Industrial sector disappointed

While the decision aligned with market expectations, it drew criticism from the business community, particularly industrialists, who expressed disappointment over the continued high cost of borrowing.

Saquib Fayyaz, Senior Vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), stated that the unchanged interest rate would increase production costs and potentially lead to a decline in exports.