Pakistan Raises Key Rate More Than Expected on Energy Costs

Pakistan’s central bank raised its benchmark interest rate for the first time in almost three years, hiking it more than economists expected, as conflict in the Middle East disrupts energy supplies and fuels inflation.

The policy rate was raised by 100 basis points to 11.5%, State Bank of Pakistan said in a statement from Karachi on Monday. Only one economist surveyed by Bloomberg News predicted the move, while the rest forecast no change or a 50 basis-point hike. Pakistan last raised its policy rate in June 2023 during an economic crisis.