Pakistan's headline year-over-year inflation rate against the State Bank's benchmark policy rate.
Pakistan's headline year-over-year inflation rate against the State Bank's benchmark policy rate.
▸CPI Inflation fell 7.1% over the selected period — from 12.60% to 11.70%.
▸Policy Rate fell 6.1% over the selected period — from 12.25% to 11.50%.
▸Over this period, CPI Inflation and Policy Rate showed a moderate relationship, moving in the same direction (correlation coefficient: 0.51).
Sources:: SBP EasyData
SBP's primary tool for controlling inflation is the policy rate — this comparison shows how closely (and with what lag) rate decisions have tracked actual inflation outcomes.
Why does the policy rate sometimes stay high after inflation falls?
Central banks often hold rates steady for a period after inflation cools to confirm the decline is durable before cutting — cutting too early risks reigniting price pressures.
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