The State Bank of Pakistan raised its key policy rate by 50 basis points to 12% on Monday, its first increase since April, after holding the rate at 11.5% through its previous three meetings. The decision takes effect from 27 October, and nine of the Monetary Policy Committee’s ten members voted in favour of the increase. Governor Jameel Ahmad told a press conference in Karachi that global crude oil prices above $100 a barrel, driven by the intensifying Middle East conflict, had worsened the inflation outlook since the committee’s September meeting. Headline inflation eased to 10.3% in September from 11.1% in August, but remains well above the central bank’s 5-7% target range. The bank said growth and the external account outlook were broadly unchanged, though risks to both had risen. It expects exports of $32.5 billion this fiscal year, imports of $71 billion and workers’ remittances of $45 billion. For households and businesses, the hike means borrowing stays costlier for longer, in exchange for keeping inflation expectations anchored. Sources: Geo News, Express Tribune. Written in our own words for information only.