Karachi (HRNW)- The State Bank of Pakistan has decided to maintain the policy interest rate at 10.5% for the next one and a half months, while reducing the cash reserve ratio for banks from 6% to 5%, according to Governor Jamil Ahmed.
The Monetary Policy Committee (MPC) held a meeting today to review key economic indicators. Governor Jamil Ahmed highlighted that inflation in December was 5.6%, with core inflation stable at 7.4%. Economic growth has been faster than expected, projected to reach 4.75% in fiscal year 2026.
The MPC noted that the trade deficit increased due to rising imports, while the current account deficit remained under control at $244 million in December 2025. Foreign exchange reserves stood at $16.1 billion, expected to exceed $18 billion by June 2026. Private sector loans grew by Rs 578 billion, though FBR revenue fell short of targets by Rs 329 billion.
The State Bank emphasized that inflation is expected to remain within the 5–7% target range, while measures like reducing the cash reserve ratio aim to boost liquidity in the banking system.
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