Pakistan's central bank likely to keep tight monetary policy as inflation stays high

Pakistan's central bank is unlikely to meet its FY27 inflation target of 5-7 percent, with September inflation at 10.3 percent, prompting expectations that it will maintain a tight monetary policy rather than cut interest rates. Experts say the SBP will keep its policy rate unchanged to support sustainable growth, despite criticism that the current 3-3.7 percent growth rate fails to create jobs or address poverty affecting 44 percent of Pakistanis. Industry leaders cite high energy costs and double-digit inflation as barriers to investment. The government raised T-bill yields by up to 75 basis points, suggesting a possible rate hike at the October 26 MPC meeting. Authorities expect inflation to average 7.5-8.2 percent depending on oil prices, while a stable rupee helps contain imported inflation.