The State Bank of Pakistan (SBP) has released its second Monetary Policy Report for 2026, outlining the economic developments and circumstances that shaped the decisions of the Monetary Policy Committee (MPC) since January.

According to the State Bank, the report aims to provide greater transparency to the public regarding the MPC’s monetary policy stance and the factors behind its decision-making.

The report reviews key economic developments and scenarios that influenced monetary policy decisions during the period under review.

The SBP noted that significant geopolitical developments had a substantial impact on Pakistan’s economic conditions during the period.

According to the report, the outbreak of conflict in the Middle East in late February resulted in a rise in global energy prices and disrupted supply chains, creating additional challenges for the global and domestic economies.

Despite the major external shock, the report said Pakistan’s economic performance during FY2026 remained broadly in line with the projections made by the Monetary Policy Committee.

The Monetary Policy Report noted that the State Bank’s cautious monetary policy stance has been helping to mitigate the impact of higher energy prices on the domestic economy.

The central bank said the report provides an assessment of the evolving economic environment and explains the considerations that guided the MPC’s policy decisions amid changing domestic and global conditions.