Decision has been taken during a meeting of Monetary Policy Committee (MPC), which reviewed changing economic outlook, particularly in light of ongoing situation in Middle East
KARACHI: (UrduPoint/UrduPoint / Pakistan Point News-April 27th, 2026) State Bank of Pakistan on Monday raised the policy interest rate by 100 basis points to 11.5%, up from 10.5%, citing rising inflation risks driven by global economic uncertainty and escalating oil prices.
The decision was taken during a meeting of the Monetary Policy Committee (MPC), which reviewed the changing economic outlook, particularly in light of the ongoing situation in the middle East. According to the central bank’s statement, increasing petroleum prices and supply chain disruptions have significantly impacted the inflation trajectory in Pakistan.
The MPC noted that global oil price volatility, linked to geopolitical tensions, has altered the domestic inflation outlook, prompting the need for a tighter monetary stance.
Following the announcement, traders and industrialists strongly criticised the move, calling it harmful for industrial growth and exports.
They warned that the increase in borrowing costs would further strain businesses already grappling with high production expenses.
Industrial representatives highlighted that rising fuel prices have already driven up manufacturing costs, and the latest interest rate hike would add to financial pressures, potentially slowing economic activity.
Economic experts also linked the policy decision to higher global oil prices and uncertainty in international markets caused by tensions in the Middle East. They cautioned that the rate hike could contribute to further inflation, as increased fuel costs typically translate into higher prices for essential commodities.
In its previous monetary policy review, the central bank had kept the interest rate unchanged at 10.5%. The latest increase marks a shift in policy amid growing concerns over inflation and external economic pressures.
