Karachi, April 25, 2026 – Expectations are building ahead of the upcoming monetary policy announcement by the State Bank of Pakistan scheduled for April 27, 2026, with market participants increasingly debating whether the central bank will raise the benchmark interest rate by up to 100 basis points amid rising global oil prices and geopolitical uncertainty.
A recent poll conducted by Topline Securities Limited suggests that 53% of market participants expect an interest rate hike in the upcoming Monetary Policy Committee (MPC) meeting. Within this group, 41.2% anticipate an increase of 50–100 basis points, while 10% expect a 25–50 basis point hike, and 2% foresee an aggressive increase of over 100 basis points.
However, sentiment is divided. Around 43% of respondents expect the SBP to maintain the current policy rate at 10.5%, while 4% even anticipate a rate cut of 50–100 basis points.
Analysts attribute expectations of a potential hike to rising global crude oil prices, volatility in international markets, and uncertainty surrounding geopolitical developments, particularly tensions involving US–Iran relations. These factors have contributed to fluctuations in energy prices, which in turn affect inflationary pressures in Pakistan.
On the other hand, some market experts argue that tightening monetary policy may not be necessary at this stage. A separate outlook by Arif Habib Limited suggests that the SBP may keep the policy rate unchanged, emphasizing the need for stability amid ongoing global uncertainty.
The inflation outlook remains relatively contained, with consumer price inflation (CPI) recorded at 7.3% year-on-year in March 2026. Analysts expect inflation to rise temporarily in the coming months due to base effects and energy price adjustments, but believe it will remain within manageable limits over the medium term.
Economic growth is also showing early signs of recovery, with GDP expanding by 3.89% in the second quarter of FY26. However, external shocks and geopolitical risks continue to pose downside risks to momentum.
On the external front, Pakistan posted a $1.07 billion current account surplus in March 2026, supported by strong remittances and improved trade balance. Foreign exchange reserves stand at $15.1 billion, while the Pakistani rupee has remained broadly stable.
Despite IMF-related expectations and external pressures, many analysts argue that policy rates are already in restrictive territory and further tightening could risk slowing economic recovery.
Globally, major central banks including the US Federal Reserve and European Central Bank have largely maintained stable policy rates, citing uncertainty in global energy markets.
Market consensus remains divided, with another survey showing 61% expecting no change in rates. Ultimately, the SBP’s decision will hinge on inflation trends, external stability, and evolving geopolitical conditions.