Pakistan’s State Bank (SBP) has maintained its key policy interest rate at 11.5% following a Monetary Policy Committee meeting. Governor Jameel Ahmed cited recent increases in inflation, stemming from the Middle East crisis, as a key factor in the decision despite previous declines. While inflation averaged 5.5% between July and February—within the government's 5-7% target—it rose to 11.1% in June and 11.7% in May. The SBP projects inflation to fall to around 7% by the end of June next year, provided the geopolitical situation doesn't worsen. The bank anticipates a current account deficit of 0-1% and aims for $20.2 billion in foreign exchange reserves by December 2026. Food price increases, particularly wheat, are also contributing to the inflationary pressures.