THE State Bank’s decision to hold the policy rate at 11.5pc is a prudent response to the heightened risks the economy faces on account of the renewed conflict in the Middle East. The economy has gained some measure of stability, but the foundations remain fragile. Inflation has moderated, but remains above the SBP target range of 5-7pc, even if the bank expects it to fall gradually, most likely near the upper limit, going forward. Foreign exchange reserves have improved, the external account is broadly manageable due to a consistent rise in remittances and economic activity is showing signs of modest recovery. Still,........

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