Overview
- The Monetary Policy Committee kept the policy rate at 10.5% on March 9, pausing an easing cycle that has cut 1,150 basis points since mid‑2024.
- The central bank pointed to a surge in global fuel prices as well as higher freight and insurance costs and disruptions to trade and travel linked to the conflict in the Middle East.
- Headline inflation rose to 7.0% year on year in February and the SBP now expects inflation to remain above 7% through the rest of FY26 and into FY27, with core inflation around 7.6%.
- Pakistan recorded a $121 million current account surplus in January and SBP-held reserves reached $16.3 billion by Feb 27, with a stated goal to build to $18 billion by June under an IMF program.
- Markets had widely anticipated a hold and the government raised petrol prices by Rs55 to Rs321.17 per litre, while business groups criticized the pause and continued to press for rate cuts.