The State Bank of Pakistan (SBP) released its latest Monetary Policy Report (MPR), outlining recent economic developments, policy decisions, and the macroeconomic outlook. With the policy rate held at 11% in June and July, the SBP expects inflation to remain within its medium-term target. The report projects moderate economic growth, manageable external pressures, and a steady buildup in foreign exchange reserves through FY26, while highlighting potential domestic and global risks. Key Highlights Policy Rate: Held steady at 11% in June and July MPC meetings to keep the real policy rate adequately positive for inflation stability. Inflation Outlook: SBP’s fan chart suggests inflation will stay within the medium-term target range. External Account: Trade deficit expected to widen; current account deficit projected at 0–1% of GDP in FY26 despite strong remittance growth. FX Reserves: Projected to rise to $15.5 billion by December 2025, supported by financial inflows and S...
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