After slashing its policy rate by half over twelve months, the State Bank of Pakistan (SBP) has held steady at 11 percent for three consecutive policy reviews since May 2025. This cautious stance reflects a ‘wait and see’ approach as the Monetary Policy Committee convenes today.

The primary concern remains external account vulnerability. Imports have surged, reaching $5.9 billion in September — the highest since August 2022, according to PBS data. On a 12-month rolling basis, imports stand at $63 billion and are climbing, while exports remain stagnant and remittances’ growth has softened. This dynamic threatens the reserve accumulation effort, with reserves still below three months of import cover.

Compounding this challenge, imports are ballooning despite tepid economic growth and subdued oil prices. The risk? Rising demand and oil prices could create turbulence, propelling........

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