Pakistan, June 15 -- In calmer times, the State Bank of Pakistan (SBP) might have been tempted to continue easing interest rates. After all, inflation had cooled considerably, the rupee had stabilized, and the external account was finally showing signs of life. But these aren't calm times.

The Monetary Policy Committee (MPC) meets this Monday, June 16, for the first time since the federal budget - and despite earlier expectations of a rate cut, markets are now betting that the central bank will hold the policy rate steady at 11%.

Now Why the U-Turn? Until a few days ago, the debate was around how much the SBP would cut. Now, the conversation has shifted to whether it should even cut at all. So, what changed? In one word: geopolitics.

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