Key Takeaways
- Analysts predict the State Bank of Pakistan (SBP) will keep its benchmark policy rate at 11.5%.
- Geopolitical tensions in the Middle East and rising oil prices are key factors influencing this decision.
- Market experts from AKD Research and Topline Securities expect no change in the policy rate.
Analysts predict that the State Bank of Pakistan (SBP) will maintain its benchmark policy rate at 11.5% during its upcoming Monetary Policy Committee (MPC) meeting on July 27, 2026. This decision is influenced by escalating geopolitical tensions in the Middle East and rising oil prices, which are overshadowing other positive economic indicators.
According to a poll conducted by Topline Securities, 97% of respondents anticipate no change in the policy rate at the upcoming MPC meeting. The remaining 3% expect a 100 basis point (bps) cut. AKD Research also echoed similar views, stating that while the external account position is comfortable and monetary policies are tight, geopolitical tensions have heightened uncertainty.
AKD Securities highlighted several positive economic indicators such as a comfortable external account position, improved credit ratings, and continued progress on structural reforms. However, they noted weakening leading economic indicators and a contraction in money supply, which support the case for supportive monetary easing. Nevertheless, renewed tensions between the US and Iran have reversed some of this optimism.
Topline Securities further emphasized that following the signing of the US-Iran Memorandum of Understanding (MoU) on June 18, 2026, market participants had priced in cumulative rate cuts of 100–150bps over the next two to three MPC meetings. However, recent tensions have led them to expect the SBP to maintain the policy rate at 11.5%.
Inflation is expected to remain well contained, with Topline Securities forecasting an average inflation rate of 7.0-8.0% during fiscal year 2027 (FY27E). However, heightened geopolitical uncertainty and recent rebounds in oil prices warrant a cautious approach before considering any policy easing.
AKD Securities, on the other hand, forecasted inflation to average 5.9% in FY27E from an average of 7.1% in FY26, primarily due to disinflation in the Transport Index as international oil prices are expected to remain subdued with a permanent resolution of the US-Iran conflict.
The SBP’s decision will be closely watched by market participants and businesses alike, given its potential impact on borrowing costs and overall economic stability. The MPC meeting is scheduled for July 27, 2026, and all eyes will be on this crucial event.
We expect the SBP to maintain the policy rate unchanged at the upcoming MPC meeting.
AKD Securities, Market Analyst
In light of these developments, we expect the SBP to maintain the policy rate at 11.5% in its July 27, 2026 MPC meeting.
Topline Securities, Market Analyst
