SBP policy rate likely to remain unchanged at 11.5% on September 14

The State Bank of Pakistan (SBP) is widely expected to keep its policy rate unchanged at 11.5% at the Monetary Policy Committee (MPC) meeting scheduled for September 14, 2026, as higher global oil prices continue to pose upside risks to inflation.

 

The MPC last met on July 27, 2026, when it unanimously decided to maintain the policy rate at 11.5%, in line with market expectations.

 

A survey conducted by Topline Securities showed that 84% of market participants expect the central bank to maintain the current rate at the upcoming meeting. Meanwhile, 14% anticipate a 50-basis-point increase, while 2% expect a 100-basis-point hike.

 

Market expectations for a status quo decision are largely based on the inflation outlook. At current oil prices of around $95 per barrel, annual average inflation for FY27 is projected to remain below 9%, providing a real interest rate spread of more than 250 basis points.

 

Improving foreign exchange reserves and a contained current account position are also supporting expectations that the central bank will leave the policy rate unchanged.

 

According to Topline Securities, interest rate expectations have remained broadly stable since the previous MPC meeting, although risks to the outlook have increased due to elevated international oil prices.

 

Renewed tensions between the United States and Iran have added uncertainty to global oil markets. Domestically, petrol prices have increased by around Rs24 per litre since the previous monetary policy meeting, while diesel prices have declined by only Rs2 per litre, despite the capping of crack margins at $41.9 per barrel.

 

Market pricing also points towards a stable policy rate. Secondary-market yields on 3-month and 6-month Treasury bills are currently around 11.41% and 11.68%, respectively, broadly unchanged from levels seen around the previous MPC meeting.

 

Topline Securities analysts expect the SBP to maintain the policy rate at 11.5% on September 14, citing a sufficient real interest rate spread and an improved external-sector outlook, particularly following Pakistan’s recent $3 billion Eurobond issuance.

 

However, analysts cautioned that persistent increases in oil prices and elevated food inflation could alter the outlook and create room for a 50-100 basis point rate increase in upcoming MPC meetings, potentially in October or December.

 

Topline Research also surveyed key market participants regarding their expectations for interest rates, inflation and the rupee-dollar exchange rate.

 

The brokerage expects the policy rate to remain at 11.5% through March 2027 under its base-case scenario. However, it noted that a sustained oil price above $95 per barrel, coupled with persistent food inflation, could lead to a 50-100 basis point hike in subsequent meetings.