SBP Rate May Rise to 12% as Inflation Risks Persist

The State Bank of Pakistan's (SBP) Monetary Policy Committee (MPC) is scheduled to announce its latest interest rate decision on Monday, with market participants largely anticipating a 50-basis-point increase amid persistent inflationary pressures and uncertainty surrounding the external economy.

SBP Governor Jameel Ahmed will chair the meeting, followed by a press conference at the central bank's head office to announce the committee's decision.

At its previous meeting on September 14, 2026, the MPC maintained the benchmark policy rate at 11.5%. However, growing concerns about inflation and potential external economic shocks have strengthened expectations that the central bank may tighten monetary policy.

A survey by Topline Securities indicates that 61% of market participants expect an interest rate increase, while 39% believe the SBP will keep the rate unchanged.

Among those surveyed, 54% anticipate a 50-basis-point hike, while 7% expect a larger increase of 100 basis points.

Topline Securities itself expects the central bank to raise the policy rate by 50 basis points to 12%, citing inflation risks and the need to guard against sustained external pressures.

The brokerage estimates that if Brent crude oil prices remain around $100 per barrel, Pakistan's headline inflation could average between 9% and 9.5% during fiscal year 2026–27.

Based on the existing policy rate of 11.5%, the estimated inflation outlook would leave the real interest rate at approximately 200 to 250 basis points, according to the brokerage's assessment.

Inflation is also projected to average above 8.5% over the next 12 months, potentially exceeding the SBP's medium-term inflation target range of 5% to 7%.

The upcoming monetary policy decision will therefore be closely watched by businesses, investors and consumers for indications of how the central bank intends to respond to inflationary risks and external economic uncertainty.