Inflation fears prompt Pakistan to tighten policy by 50bp
Although price growth has eased slightly, it remains well above 5–7% target range
The State Bank of Pakistan (SBP) on October 26 raised its key policy rate from 11.5% to 12%, marking the first change in its stance since a 100 basis point hike in April.
The 50bp hike came as a surprise to some market observers, which had expected the bank to keep rates on hold. However, in a statement, the bank said it had been a majority decision, with nine of the 10 monetary policy committee (MPC) members in favour.
The SBP noted the intensification of conflict in the Middle East and “low
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