The SBP Governor Jameel Ahmad has said that any future policy rate cuts will depend on the economic effects of recent floods and the outcome of the ongoing International Monetary Fund (IMF) review. He made these remarks during an interview with Bloomberg as the central bank maintains a cautious monetary stance amid inflation concerns.
According to the SBP Governor, inflation may temporarily rise above the 5%–7% medium-term target range in early 2026 but will stay within the goal on average for the current and next fiscal years. His statement comes ahead of the upcoming Monetary Policy Committee (MPC) meeting scheduled for October 27, while an IMF team is in Pakistan for a review of the $7 billion loan program.
In its last meeting, the MPC decided to keep the policy rate unchanged at 11%, citing the negative effects of floods on Pakistan’s short-term economic outlook. The monsoon floods caused severe damage worth billions of dollars, increasing inflationary pressures and fiscal challenges.
The SBP Governor said that the central bank’s tight monetary policy has helped control inflation and will continue to play an important role in maintaining stability. He added that coordination between monetary and fiscal policies has shown “good progress” and is supporting economic balance.
Regarding the IMF program, Jameel Ahmad noted that it is “progressing well,” adding that Pakistan has met and even exceeded its foreign reserve targets. Over the last three years, the SBP has purchased around $20 billion from the interbank market, strengthening reserves and reversing its previous position as a net seller.
The SBP Governor also discussed Pakistan’s trade outlook, saying textile exporters have received increased interest after securing a 19% tariff rate on exports to the US. He further mentioned that Pakistan is working on a new regulatory framework for cryptocurrency to ensure strict oversight and risk management.
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