State Bank of Pakistan. Photo: File
The State Bank of Pakistan’s Monetary Policy Committee on Monday kept the policy rate unchanged at 11.5 per cent, in line with market expectations.
“The MPC has decided to keep the policy rate unchanged at 11.5 per cent in its meeting held on September 14, 2026,” said a statement by the SBP.
The decision is the third consecutive hold after the 100-basis-point increase in April, the first hike in nearly three years. The July meeting had also left the rate at 11.5 per cent, citing an improved macroeconomic outlook tempered by risks from renewed conflict in the Middle East.
The Monetary Policy Committee (MPC) has decided to keep the Policy rate unchanged at 11.5 percent in its meeting held on September 14, 2026.
— SBP (@StateBank_Pak) September 14, 2026
JS Research had framed this meeting as “status quo with an asterisk.” Muhammad Waqas Ghani wrote on September 12 that the MPC would hold at 11.5 per cent on Monday, but that if geopolitical tensions persist into the December quarter, the next move would be an increase. One-third of respondents in the firm’s recent survey expected a hike by December 2026.
That asterisk is the inflation outlook. JS has raised its FY27 inflation forecast by about 0.8 percentage points to around 9.1 per cent, mainly because oil is expected to take longer to normalise. For Pakistan, the bigger vulnerability is not only the CPI print. Petroleum is the largest import item. A prolonged period of high oil prices can push the current account deep into the red even if headline inflation looks manageable for a few months.
The trade numbers already show the strain. JS notes the monthly trade deficit averaged $3.3 billion over April–July 2026 against $2.6 billion in 9MFY26. Imports have risen about 15 per cent to near $6 billion a month, while exports have stayed flat.
Read More: Economists urge SBP to hold rate at 11.5%
Most analysts had expected no change. A Topline Securities poll last week showed 84 per cent of respondents forecasting a hold, 14 per cent a 50-basis-point hike and 2 per cent a 100-basis-point increase. A Reuters survey found eight of nine analysts on hold.
The caution is easy to read. Headline inflation rose to 11.1 per cent in August from 9.2 per cent in July, back above the SBP’s 5–7 per cent medium-term target. Global oil prices have climbed on fresh Middle East disruptions, raising the risk that fuel, freight and food prices stay sticky.
Pakistan’s external buffers are stronger than a year ago. Total liquid reserves were about $23.7 billion as of September 4, with SBP holdings at $18.3 billion. The government recently raised $3 billion in a Eurobond.
The next scheduled MPC meeting is October 26.
