Pakistan, June 17 -- In a widely expected move, the State Bank of Pakistan (SBP) kept the policy rate unchanged at 11 percent on Monday, citing emerging external sector risks, the fiscal impact of the upcoming budget, and a recent rebound in international oil prices.

The decision, taken at the Monetary Policy Committee (MPC)'s meeting, suggests that the central bank is keen to consolidate earlier rate cuts while monitoring inflationary pressures that may resurface in the coming months.

The MPC observed that "the increase in inflation in May to 3.5 percent year-on-year was in line with its expectation, whereas core inflation declined marginally." Taking stock of these developments and potential risks, the Committee assessed that the real...