State Bank of Pakistan Governor Jameel Ahmad has said the central bank’s current monetary policy stance is appropriate for keeping inflation within its medium-term target of 5% to 7% while allowing economic activity, investment and employment to continue. The State Bank maintained its benchmark interest rate at 11.5% in July, citing inflationary pressures and risks to the external account arising from geopolitical tensions. The decision comes as inflation showed signs of easing, with consumer inflation declining to 9.2% in July from 11.07% in June, while average inflation for FY26 stood at 7.1%.
Ahmad said Pakistan had made significant progress towards economic stability during the past year, supported by prudent fiscal and monetary policies and greater discipline across the economy. According to the governor, the country is gradually moving beyond the stabilisation phase and towards a period of sustainable economic growth. Pakistan’s GDP growth reached 3.7% in FY26, while economic growth is projected to remain between 3.5% and 4.5% in FY27. The monetary policy stance is therefore being maintained with consideration for both inflation management and the need to provide sufficient space for economic activity, investment and job creation.
The governor also pointed to improvements in Pakistan’s external sector, particularly the strong performance of worker remittances. Remittance inflows exceeded $41 billion during FY26, providing additional support to the country’s external position. These inflows are expected to increase further to around $44 billion in FY27. Foreign exchange reserves also strengthened, reaching $18.4 billion by the end of FY26, with the State Bank expecting reserves to exceed $21 billion during FY27. The improvement in remittances and reserves provides greater support to the country’s external account as economic activity continues to recover.
Alongside monetary and external sector developments, Ahmad highlighted the State Bank’s efforts to modernise Pakistan’s financial infrastructure. He referred to the launch of PRISM+, which has enhanced the processing and settlement of large-value payments by making these transactions faster, safer and more efficient. The development forms part of the central bank’s broader efforts to strengthen payment infrastructure and support a financial system that can handle increasing transaction volumes while maintaining security and efficiency.
The governor also highlighted the rapid growth of retail digital transactions in Pakistan. According to Ahmad, the number of retail digital transactions increased from around 10 billion to 12 billion over the past year. The rise reflects increasing public adoption of digital payment channels and contributes to the development of a more documented and transparent economy. Greater use of digital payments also supports the broader shift towards formal financial services and reduces reliance on cash-based transactions across different parts of the economy.
Ahmad further highlighted initiatives aimed at expanding access to financial products and strengthening the country’s financial system. The launch of InvestPak has provided the public with a convenient and secure channel to access investment opportunities, while the State Bank continues to promote Islamic banking, green finance, cybersecurity and financial technology. These initiatives, alongside improvements in payment infrastructure and digital transaction volumes, form part of the central bank’s broader efforts to modernise financial services. With inflation still above the medium-term target but showing signs of moderation, the SBP has indicated that the current 11.5% policy rate remains suitable for maintaining price stability while allowing Pakistan’s economic recovery to continue.
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