The State Bank of Pakistan (SBP), the country’s central bank, will deliver its SBP monetary policy rate announcement on Monday, after the Monetary Policy Committee (MPC) meets to set the key policy rate, now at 11.5 per cent. Market participants are bracing for a possible increase as inflationary pressures persist and global oil prices rise.
The MPC, chaired by the SBP governor, is due to review the economic outlook and then announce the decision at a press conference. The meeting will weigh the latest trends in inflation, economic activity and the external sector—including imports, exports and exchange-rate movements—along with international oil and other commodity prices that could push up domestic energy and transport costs.
What the committee will weigh
Beyond prices and the external accounts, the committee is also expected to look at large-scale manufacturing, crop production and swings in food prices, plus other data that shape the inflation outlook and the pace of growth. Higher global commodity prices and longer supply-chain disruptions, linked to escalating tensions in the Middle East, were already flagged as risks when the MPC met in September.
At that September meeting, the rate was left unchanged by a majority of seven out of 10 members. The committee noted that headline inflation had climbed to 11.1 per cent year-on-year in August from 9.2 per cent in July.
Rate path and market expectations
The central bank last raised the policy rate by 100 basis points to 11.5 per cent in April—its first hike in nearly three years—and kept it unchanged at the July and September meetings. Ahead of Monday’s SBP monetary policy rate announcement, expectations have shifted toward tighter policy.
Most financial experts have pointed to a 50-basis-point increase. Some economic stakeholders have argued for a move of up to 100 basis points to contain inflation. Bankers and analysts who favour a hike stress inflation risks; representatives of industrial and trade bodies counter that higher borrowing costs would squeeze financing, investment and industrial activity. Some industry groups want the policy rate brought down to single digits.
Timeline: what has happened so far
- April: The SBP raised the policy rate by 100 basis points to 11.5 per cent, its first hike in nearly three years.
- July: The MPC kept the policy rate unchanged.
- August: Headline inflation rose to 11.1 per cent year-on-year, up from 9.2 per cent in July.
- September: The MPC held the rate at 11.5 per cent by a 7–10 majority vote and warned about higher global commodity prices and supply-chain disruptions.
- Monday: The next MPC meeting and policy-rate decision are due, with an announcement at a post-meeting press conference.
Monday’s choice will show how the SBP balances the need to curb inflation against the risk that dearer credit could slow business investment and growth. The bank’s medium-term aim remains bringing inflation into a 5 to 7 per cent target range while keeping prices stable.
Aasan alfaaz mein
State Bank Monday ko monetary policy ka faisla sunayega. Ab policy rate 11.5 percent hai. Mehngai aur oil ke rates ki wajah se bazaar ko umeed hai ke rate barh sakta hai. Agar rate barhta hai to loan aur business ki financing mehngi ho sakti hai.
