The State Bank of Pakistan (SBP) has held the key policy rate at 11.5 per cent, the bank’s governor has told a press conference, as renewed US-Iran hostilities threaten to push energy costs and inflation higher in the import-dependent country.

The central bank decision came weeks after the ceasefire agreement between Washington and Tehran collapsed.

SBP Governor Jameel Ahmad said there will be some reduction in inflation in July, adding that he hoped inflation will start falling in the next two months if the conflict does not escalate.