Pakistan central bank holds key policy rate at 11 percent for fourth straight meeting

A money changer counts Pakistan's currency at a market in Karachi on January 6, 2023. (AFP/ file)
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Updated 27 October 2025
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Pakistan central bank holds key policy rate at 11 percent for fourth straight meeting

  • The move comes at a time when the central bank is juggling modest economic growth, external‐sector vulnerabilities and inflation risks
  • The central bank has lowered rates by 1,100 basis points since June 2024, when they peaked at 22 percent after inflation neared 40 percent a year before

ISLAMABAD: The Monetary Policy Committee (MPC) of the State Bank of Pakistan on Monday decided to keep the policy rate unchanged at 11 percent, marking the fourth consecutive meeting in which borrowing costs have been held steady.

The SBP’s decision comes at a time when the central bank is juggling modest economic growth, external‐sector vulnerabilities and inflation risks. After having slashed rates significantly in 2024, it entered a pause campaign earlier this year, choosing stability over further easing given flood-related supply disruptions, rising food inflation and pressures on the current account.

“The Monetary Policy Committee decided to keep the policy rate unchanged at 11 percent in its meeting held on October 27, 2025,” the central bank said on X.

The central bank added that the current account deficit is expected to remain within the 0–1 percent of GDP range in fiscal 2026, with the realization of official inflows projected to raise foreign exchange reserves to $15.5 billion by December 2025 and around $17.8 billion by June 2026.

Last week, all 10 analysts surveyed by Reuters said they expected the State Bank of Pakistan (SBP) to keep the policy rate unchanged, extending its pause as recent floods ravaged farmland and border closures with Afghanistan since Oct. 11 drove up prices of staples like tomatoes and apples.

“The SBP [maintained] status quo amid concerns about rising inflation following flood losses and [to] support rupee,” Ahsan Mehanti of Arif Habib Commodities said, attributing the central bank decision to the “IMF (International Monetary Fund) pressure to keep a tight fiscal and monetary policy.”

The SBP last held rates in September, warning floods could push inflation above its 5–7 percent target. Pakistan’s headline inflation rate accelerated to 5.6 percent on a year-on-year basis, up 2 percent from the previous month.

Monsoon floods swamped farmland and industrial hubs in Pakistan’s breadbasket Punjab province, killing more than 1,000 people nationwide, displacing 2.5 million and damaging crops and factories.

The central bank has lowered rates by 1,100 basis points since June 2024, when they peaked at 22 percent after inflation neared 40 percent the year before. Its last 100-bps cut came in May, followed by holds in June, July, and September amid uncertainty over energy and food prices.


Pakistan opposition continues sit-in outside parliament over ex-PM Khan’s eye treatment

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Pakistan opposition continues sit-in outside parliament over ex-PM Khan’s eye treatment

  • Opposition leader says the protest will continue until Imran Khan, currently at Adiala prison, is admitted to Shifa Hospital
  • The government says Khan’s medical report will be compiled again, promising no negligence in the matter under judicial oversight

ISLAMABAD: Pakistan’s opposition alliance is continuing its sit-in outside the Parliament House in Islamabad for the second day on Saturday, seeking shifting of jailed former prime minister Imran Khan to a private hospital for treatment of his worsening eye condition.

The protest follows a rare prison visit earlier this week by Barrister Salman Safdar, appointed as amicus curiae by the Supreme Court to assess Khan’s health and living conditions at Rawalpindi’s Adiala jail. In his report, Safdar highlighted “seriousness” of Khan’s ocular condition and recommended an independent examination.

On Friday evening, opposition members gathered outside the parliament building in Islamabad to stage a sit-in, with the police locking its gates and cordoning off surrounding roads to prevent protesters from gathering in front of the building, witnesses and opposition leaders said.

Mehmood Khan Achakzai, the head of the Tehreek-e-Tahafuz-e-Ayeen-e-Pakistan opposition alliance, criticized the authorities for the measures to prevent opposition members from reaching the sit-in venue in Islamabad.

“We are not the ones who make threats, but if you continue with this attitude, after two or three days every roundabout in Pakistan will be closed,” Achakzai said on X late Friday. “Then we will not even be able to handle the people.”

In an earlier post on X, the alliance said its leadership would continue the sit-in “until Imran Khan is admitted to Al-Shifa Hospital.”

“We have staged a sit-in for the earliest medical check-up of Imran Khan, which would take just ten minutes,” Achakzai told reporters on Friday evening. “If it is conducted, we will end our protest.”

According to a Feb. 6 medical report from the Pakistan Institute of Medical Sciences (PIMS) cited in Safdar’s filing, Khan was diagnosed with “right central retinal vein occlusion” after reporting reduced vision in his right eye. He underwent an intravitreal injection at PIMS and was discharged with follow-up advice.

In his interaction with Safdar, Khan said he had suffered “rapid and substantial loss of vision over the preceding three months” and claimed his complaints had not been addressed promptly in custody. He further said he had been left with “only 15 percent vision in his right eye.”

Safdar’s report noted that the 73-year-old former premier appeared “visibly perturbed and deeply distressed” over the loss of vision, though it also recorded that he expressed satisfaction with his safety, basic amenities and food provisions in prison.

Responding to the controversy, Parliamentary Affairs Minister Tariq Fazal Chaudhry rejected PTI’s claims that Khan had been suffering from an eye issue since October last year, noting that the ex-premier was visited by his sister on Dec. 2 but she did not mention the medical issue.

“Medical report will be compiled again, the chief justice of the Supreme Court is himself monitoring this case,” he said. “Wherever it will be requested, Imran Khan’s eye will be examined at.”

Chaudhry vowed there would be no negligence.

Khan has been in custody since August 2023 in connection with multiple cases that he and his party describe as politically motivated. The government denies the allegation.

Concerns over his health resurfaced after authorities confirmed he had briefly been taken from prison to a hospital in Islamabad for an eye procedure. While the government said his condition was stable, Khan’s family and PTI leaders alleged they were not informed in advance and that he was being denied timely and independent medical access.