Pakistan Tasso Di Interesse

The central bank of Pakistan kept its key interest rate steady at 11% during its June meeting, in line with expectations, after a surprise 100 bps cut in its May meeting. The decision came amid the ongoing conflict between Israel and Iran, and volatile global oil prices, which have added upside risks to inflation. The bank’s Monetary Policy Committee (MPC) said in a statement announcing the decision that it expected some near-term volatility in inflation, which is projected to gradually edge up and stabilize within the 5–7% target range. “This outlook, however, remains subject to multiple risks emanating from potential supply-chain disruptions from regional geopolitical conflicts, volatility in oil and other commodity prices, and the timing and magnitude of domestic energy price adjustments,” the MPC said. Headline inflation rose to a five-month high of 3.5% in May, up from a near six-decade low of 0.3% in April, exceeding the finance ministry’s projection of 1.5%–2%.