Pakistan’s central bank decided on Monday to keep its key interest rate unchanged at 10.5 percent, as rising global oil prices and tensions in the Middle East create fresh uncertainty about inflation.
The decision was announced after the latest meeting of the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP). It was the second policy review of 2026.
Many market experts had already expected the central bank to leave the rate unchanged. Analysts said the recent rise in global energy prices and growing tensions in the Gulf region have made the economic outlook less clear.
Oil prices have climbed sharply in recent weeks. Brent crude has risen about 25 percent in the past two to three weeks, increasing worries that higher fuel costs could push inflation up again.
Brokerage house Arif Habib Limited had earlier predicted that the SBP would maintain the current rate. It said the central bank was likely to take a cautious approach due to the fast changing global situation.
Another brokerage firm, Topline Securities, also expected no change in the policy rate. It pointed to a recent survey showing that about 96 percent of market participants believed the SBP would keep rates steady.
The shift in market expectations has been linked to the worsening situation in the Gulf region. Higher oil prices often raise costs for countries like Pakistan that rely on imported energy.
A separate poll by Reuters also suggested that the central bank would avoid cutting interest rates for now. The survey included 10 analysts, all of whom expected the policy rate to remain at 10.5 percent.
At its previous meeting on January 26, the MPC had also kept the policy rate unchanged at the same level. That decision had surprised some market observers who were expecting a cut at the time.
With global energy markets under pressure and inflation risks still present, analysts say the central bank is likely to stay cautious in the coming months.
