Karachi, October 26, 2025 – The State Bank of Pakistan (SBP) will hold its next Monetary Policy Committee (MPC) meeting on October 27, 2025, to review the benchmark interest rate.
Market analysts and investors are keenly watching the outcome as it will shape the country’s financial and inflation outlook for the coming months.
According to a poll conducted by Topline Securities, 85% of market participants expect the SBP to keep the policy rate unchanged, compared to 72% in the previous survey. Analysts believe the expectation of a “no change” decision is due to inflationary pressure caused by recent floods, which is expected to stay high for the next few months.
Only 15% of participants expect a rate cut, with 5% forecasting a 25 basis point (bps) reduction and 10% predicting a 50 bps cut. Historically, during the 2010–2011 floods, Pakistan’s major crop areas — including wheat, rice, and cotton — saw a decline of 3–18%, while rice production dropped by nearly 30%. This year, experts expect around a 10% loss in cotton and rice production due to flood damage.
Analysts expect the SBP to maintain the policy rate at 11% throughout FY26. They point out that inflation may rise to 8–9% in the last quarter of FY26 (April–June) before stabilizing between 6–7%. Despite high interest rates, non-oil imports have continued to rise, signaling sustained economic activity that supports a stable rate policy.
The Topline Research poll also revealed the following expectations for FY26:
• Policy Rate: 66% expect rates to stay at 11% through December 2025, while 34% see a decline to 10%.
• Inflation: 42% believe inflation will average 6–7%, while 32% expect it to exceed 7%.
• Exchange Rate: 44% expect the Pakistani rupee to stay between Rs282–285 per USD by December 2025, while others forecast it in the Rs285–290 range.
Analysts project the rupee to close between Rs283–288 by December 2025 and Rs292–297 by June 2026.
Disclaimer: This article is for informational purposes only. Monetary policy decisions depend on economic data and central bank analysis.