Pakistan Hikes Rate to 11.50%

Islamabad, Apr 27 (PTI) Pakistan's central bank on Monday raised the policy rate by 100 basis points to 11.50 per cent due to fear of inflation in the wake of rising petroleum prices following the conflict in West Asia. 

The State Bank of Pakistan (SBP) said in a statement that the decision was taken by its Monetary Policy Committee (MPC) in a meeting.

The hike is the first in almost three years, and it is in line with market expectations that the interest rate was bound to see a rise.


The main reason is the fear of inflation as rising oil prices from the US-Israel war on Iran threatened to push inflation higher in the import-dependent nation.

Pakistan's consumer price inflation rose to 7.3 per cent in March, breaching the SBP's 5 to 7 per cent target range, and it is feared to shoot to 10 per cent by the end of April.

The Pakistan Stock Exchange (PSX) reacted negatively to the SBP announcement, with the KES 100 index losing 1,174.69 points and closing at 169,497.

Earlier, the SBP had cut rates by a cumulative 1,150 bps since June 2024, from a record high of 22 per cent to 10.5 per cent.