Future policy rate cuts tied to flood impact, IMF review, says SBP Governor: report

Further policy rate cuts by the State Bank of Pakistan (SBP) will be determined by the economic fallout from recent floods and the outcome of the ongoing International Monetary Fund (IMF) review, said Governor SBP Jameel Ahmad in an interview with Bloomberg. The development came as the central bank maintains a cautious stance on monetary policy amid renewed inflation risks. As per the report, Ahmad said “inflation may temporarily exceed the upper bound of the 5%-7% medium-term target range in early 2026 but on average will be within the goal in the current and next fiscal years”. The central bank chief’s comments come ahead of the Monetary Policy Committee (MPC) meeting, which is scheduled to meet on October 27, while an IMF team is in Pakistan for a second review of its $7 billion loan program.