On Monday, the State Bank of Pakistan raised its key policy rate by 100 basis points to 11.5%, marking its first increase in nearly three years. This decision comes as the nation faces rising inflation, with consumer price inflation accelerating to 7.3% in March, surpassing the central bank's target range of 5% to 7%. Analysts had anticipated that the bank would maintain the previous rate of 10.5%, but the ongoing Iran-U.S. war has kept oil prices high, contributing to inflationary pressures. The central bank has previously cut rates by a total of 1,150 basis points since June 2024, following a peak of 22%. The International Monetary Fund (IMF), under which Pakistan is currently operating a $7 billion program, has advised against premature easing of monetary policy and emphasized the need for a positive real interest rate to stabilize the economy.