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Market Consensus on SBP Policy Rate
Probability of MPC decisions for the April 27 meeting based on analyst surveys.
Primary Sources
SBP likely to hold policy rate at 10.5% amid Middle East tensions
The State Bank of Pakistan (SBP) will likely keep the policy rate unchanged at 10.5% during the upcoming Monetary Policy Committee (MPC) meeting scheduled for Monday. In its previous meeting, the SBP had also opted to maintain the policy rate at 10.5%, aligning with market expectations amid rising geopolitical tensions in the Middle East and concerns over increasing energy costs and inflation risks. Experts believe that, given the current global uncertainty, policymakers are likely to prioritise caution over aggressive action. As such, they expect no adjustment in the policy rate in the April monetary policy statement. As per the experts, global conditions remain volatile, particularly due to ongoing tensions between the US and Iran, which continue to influence market sentiment. Oil prices, in particular, have been fluctuating sharply—impactful enough to sway markets, but lacking a consistent direction. These external pressures have had some effect on domestic inflation, though not enough to disrupt the overall trend. For instance, transport inflation surged by 12% month-on-month in March and is projected to rise to around 15% in April. However, the broader impact appears limited, with no strong signs of sustained inflationary pressures spreading across the economy. Inflation can move into double digits in the final quarter of FY26, largely due to base effects and energy price adjustments rather than excess demand. This increase is expected to be temporary. Energy shocks, regional tensions deteriorate business sentiments
Rate decision in focus as SBP weighs inflation risks against external ...
Pakistan’s central bank will convene its Monetary Policy Committee on April 27, with analysts divided over whether rising inflation and oil price volatility warrant a shift from the current easing trajectory. A majority of economists surveyed expect the State Bank of Pakistan to keep the benchmark policy rate unchanged at 10.5%, arguing that recent price pressures are largely supply-driven and may prove temporary. According to the poll, six of ten analysts forecast no change in the policy rate, while three anticipate a 50-basis-point increase and one expects a steeper 100-basis-point hike, marking a potential return to tightening not seen since before the rate-cut cycle began in mid-2024. The central bank has reduced borrowing costs by a cumulative 1,150 basis points since June 2024, when the policy rate peaked at a record 22%, as inflation eased and macroeconomic conditions stabilised. The most recent adjustment came in January, when the rate was lowered by 50 basis points. Recent inflation data has complicated the outlook. Consumer prices rose 7.3% year-on-year in March, up from 7% in February, exceeding the central bank’s target range of 5% to 7%, with some analysts warning inflation could move closer to 10% by April if energy costs remain elevated. Global oil market uncertainty linked to the Iran–United States conflict has kept Pakistan’s import bill under pressure, even after a ceasefire reduced immediate tensions. The lack of a lasting peace agreement has sustained volatility in energy markets, feeding into domestic inflation risks. Still, analysts favouring a pause point to improving external indicators. Pakistan recorded a $1.07 billion current account surplus in March, while the rupee has remained broadly stable, factors seen as supporting a cautious wait-and-see approach. Others argue that financial markets have already priced in a modest increase in interest rates, suggesting the central bank could opt for a precautionary hike if inflation risks intensify in the coming months. The central bank has maintained that monetary policy decisions will aim to preserve a positive real interest rate under Pakistan’s ongoing programme with the International Monetary Fund, which has previously cautioned against premature monetary easing.
Pakistan's inflation to remain in double digits through April 2026 amid ...
Karachi [Pakistan], April 23 : Inflation in Pakistan is likely to stay in double digits through April 2026, as persistent cost pressures continue to weigh heavily on the economy. Overall price levels remain high due to sustained energy costs, currency fluctuations, and structural inefficiencies, as reported by The Express Tribune.
State Bank Announces Monetary Policy on Interest Rates Today
State Bank announces monetary policy interest rates decision impacting inflation, borrowing costs, and Pakistan's economic direction.
