Pakistan's central bank (the State Bank of Pakistan) raised its benchmark policy rate by 100 basis points to 11.5% on Monday — the country's first rate hike in nearly three years — citing rising global energy prices and freight costs driven by the ongoing US-Israel war on Iran, which threaten to push inflation in the heavily import-dependent economy to double digits in the coming months. The Monetary Policy Committee warned that inflation, already at 7.3% in March, is expected to remain above its 5–7% target range for most of the next fiscal year, and deemed tighter policy necessary to anchor inflation expectations and contain second-round effects of the supply shock. The decision drew sharp criticism from trade and industry leaders, who argued the hike would raise borrowing costs for manufacturers and exporters, undercut Pakistan's competitiveness against regional peers with far lower interest rates, and choke credit to small and medium enterprises — though the Overseas Investors Chambers of Commerce and Industry backed the move as essential for macroeconomic stability and foreign investment confidence.