The State Bank of Pakistan (SBP) maintained its policy rate steady at 11 per cent on Monday for a third straight meeting as policymakers weighed inflation risks from flood-hit crops against a fragile economic recovery.

After slashing the interest rate by 1,000 basis points (bps) from 22pc since June 2024 in seven intervals, the central bank has maintained it at 11pc since May. However, the business community had expressed disappointment over the decision.

“The Monetary Policy Committee (MPC) decided to keep the policy rate unchanged at 11 per cent in its meeting today,” an SBP statement said.

The MPC noted that inflation remained “relatively moderate in both July and August, whereas core inflation continued to decline at a slower pace”.

“Economic activity — as captured by high-frequency economic indicators, including large-scale manufacturing (LSM) — gained further momentum. However, the near-term macroeconomic outlook has deteriorated slightly in the wake of the ongoing floods,” the committee noted.

It cautioned: “This temporary yet significant flood-induced supply shock, particularly........

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