The State Bank of Pakistan (SBP) will likely keep the policy rate unchanged at 10.5% during the upcoming Monetary Policy Committee (MPC) meeting scheduled for Monday.
In its previous meeting, the SBP had also opted to maintain the policy rate at 10.5%, aligning with market expectations amid rising geopolitical tensions in the Middle East and concerns over increasing energy costs and inflation risks.
Experts believe that, given the current global uncertainty, policymakers are likely to prioritise caution over aggressive action. As such, they expect no adjustment in the policy rate in the April monetary policy statement.
As per the experts, global conditions remain volatile, particularly due to ongoing tensions between the US and Iran, which continue to influence market sentiment. Oil prices, in particular, have been fluctuating sharply—impactful enough to sway markets, but lacking a consistent direction.
These external pressures have had some effect on domestic inflation, though not enough to disrupt the overall trend.
For instance, transport inflation surged by 12% month-on-month in March and is projected to rise to around 15% in April. However, the broader impact appears limited, with no strong signs of sustained inflationary pressures spreading across the economy.
Inflation can move into double digits in the final quarter of FY26, largely due to base effects and energy price adjustments rather than excess demand. This increase is expected to be temporary.
Energy shocks, regional tensions deteriorate business sentiments
