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  "path": "/news/1978691/sbp-seen-holding-rates-steady-as-oil-surge-threatens-inflation-trajectory",
  "publishedAt": "2026-03-05T11:08:21.000Z",
  "site": "https://www.dawn.com",
  "tags": [
    "Business",
    "rising global energy prices",
    "_held the rate ​in January_",
    "Higher oil prices"
  ],
  "textContent": "The central bank ​is expected to hold its key policy rate steady at a policy ‌review on Monday, a _Reuters_ poll showed, as rising global energy prices and regional tensions cloud the inflation outlook and limit the room for cuts.\n\nAll 10 analysts in a _Reuters_ poll expect the State ​Bank of Pakistan (SBP) to hold the rate at 10.5 per cent, after policymakers _held the rate ​in January_.\n\nThe central bank has cut the key rate by a cumulative ⁠11.5 percentage points since mid-2024, from a record high of 22pc.\n\nEscalating Middle East tensions ​after the US and Israel attacked Iran have raised the risk of disruption to shipping ​through the Strait of Hormuz and pushed oil-and-gas prices higher, adding to Pakistan’s import bill and inflationary pressures.\n\nAnalysts expect inflation to average between 6pc and 8pc in the coming months _,_ but warned higher oil prices could push it up ​further.\n\n“Energy prices should dictate the policy rate trajectory. Inflation could average around 7pc during ​the second half of FY26,” AKD Securities analyst Muhammad Aliv said.\n\nThe country’s heavy reliance on imported fuel leaves ‌it ⁠vulnerable to global price shocks.\n\n“Higher oil prices widen the trade deficit and pressure the rupee,” Waqas Ghani, head of research at JS Capital said.\n\nGhani said every $10 per barrel increase in crude prices adds about 0.5 percentage points to inflation, which clocked in at 7pc in ​February, jumping from 5.8pc ​in January.\n\nThe SBP ⁠says it aims to maintain a positive real interest rate to anchor inflation expectations under Pakistan’s $7 billion IMF programme, though inflation could ​exceed its 5pc–7pc target range for a few months this year ​as growth ⁠picks up and imports widen the trade deficit.\n\nGovernor Jameel Ahmad told _Reuters_ last month that policymakers remained focused on medium-term price stability, even as the economy was projected to grow between 3.75pc and 4.75pc in ⁠the financial ​year 2026, supported by stronger domestic demand and ​earlier monetary easing.\n\nAnalysts said external risks, including higher oil prices, rupee pressure, and a widening trade deficit, could delay ​any move toward further monetary easing.",
  "title": "SBP seen holding rates steady as oil surge threatens inflation trajectory"
}