ISLAMABAD, March 9 (Xinhua) -- The Monetary Policy Committee of the State Bank of Pakistan (SBP) on Monday decided to keep the policy rate unchanged at 10.5 percent, citing rising global uncertainty due to the ongoing conflict in the Middle East.
In its monetary policy statement, the central bank said that recent economic data were largely consistent with the macroeconomic projections shared in January, but the evolving geopolitical situation had significantly increased risks to the economic outlook.
The bank noted that the conflict in the Middle East had triggered a sharp rise in global fuel prices, freight and insurance costs, while also disrupting cross-border trade and travel.
It said the intensity and duration of the conflict would be key factors determining its impact on Pakistan's domestic economy.
Despite the uncertainties, the committee observed that Pakistan's macroeconomic fundamentals, particularly inflation and foreign exchange buffers, were stronger compared to the period when the Russia-Ukraine conflict began in early 2022.
It added that the outlook for key macroeconomic indicators in fiscal year 2026 remained within earlier projected ranges, although risks had increased significantly. ■