KARACHI(National Times)- The State Bank of Pakistan (SBP) on Monday decided to keep the policy rate unchanged at 11.50 percent. The decision was taken in a meeting of the Monetary Policy Committee, chaired by Governor Jameel Ahmad, where evolving situation in the Middle East was also reviewed. According to a recent survey, 60% of the business community expected the central bank to maintain the current interest rate, while 24% predicted an increase. Around 10% believed the rate may be reduced. The MPC said in its statement that the latest data broadly matched the macroeconomic projections shared after the January meeting. However, it noted that the economic outlook had become highly uncertain following the outbreak of war in the Middle East. The committee observed that the conflict had triggered a sharp rise in global fuel prices, along with higher freight and insurance costs, while also disrupting cross-border trade and travel. It added that the scale and duration of the conflict would play a key role in determining its impact on the domestic economy as the situation continues to evolve.The MPC also stressed that prudent monetary and fiscal policies remain crucial in strengthening the economy’s ability to withstand external shocks. “The MPC’s initial assessment of the evolving geopolitical situation indicates that the outlook for key macroeconomic variables for FY26 is within the earlier projected ranges. However, risks for the macroeconomic outlook have increased significantly,” it said. It also noted several key developments aside from ongoing geopolitical events; inflation rising to 5.8pc and 7pc in January and February, respectively; current account surplus in January and buildup in forex reserves; large-scale manufacturing growing by 0.4pc year-on-year; consumers’ inflation expectations and confidence improving; tax collection by the Federal Board of Revenue remaining below target for January and February; and the US administration announcing global uniform tariffs. “The committee noted the high degree of uncertainty in the outlook for international commodity prices and supply-chain disruptions in the backdrop of the war in the Middle East. In this context, the MPC deemed today’s decision as appropriate, and reaffirmed its commitment to ensuring hard-earned price stability. The committee also stressed the need for expediting structural reforms to ensure sustainable economic growth,” the statement said.