The Monetary Policy Committee of the State Bank of Pakistan raised the policy rate by 100 bp to 11.50 % with effect from 28 April 2026, arguing that protracted Middle-East hostilities have pushed up global energy, freight and insurance costs, heightened supply-chain disruptions and are set to lift inflation above the 5–7 % target for several quarters, warranting a tighter stance to anchor expectations and curb second-round effects. The move unwinds December 2025’s 50 bp cut to 10.50 % and follows an unchanged decision in March 2026. Headline CPI accelerated to 7.3 % y/y in March and core inflation edged up to 7.8 %, while the MPC now sees inflation reaching double digits soon and staying above the target band through most of FY27 amid deteriorating consumer and business sentiment. Real GDP expanded 3.8 % in H1-FY26, but growth is expected to slip toward the lower end of earlier projections, with private-sector credit still advancing about 13 % and broad money growth easing to 14.5 % by 10 April from 16 % in February. Externally, resilient remittances produced a small current-account surplus in July-March FY26, and foreign-exchange reserves stood at USD 15.8 bn on 24 April, with Eurobond issuance expected to lift them above USD 18 bn by June despite sizable debt repayments. The Committee highlighted the need to keep strengthening FX buffers and maintaining fiscal discipline, and it warned that the inflation path remains subject to the duration and intensity of the regional con
State Bank of Pakistan 2026-04-27
State Bank of Pakistan hikes policy rate 100 bp to 11.50 % effective 28 April 2026
State Bank of Pakistan’s Monetary Policy Committee raised the policy rate by 100 bp to 11.50 % effective 28 April 2026, reversing December’s 50 bp cut, as Middle East hostilities boost energy, freight and insurance costs and are expected to push inflation above the 5–7 % target for several quarters. The MPC now foresees double-digit inflation persisting through most of FY27 and stresses the need to anchor expectations, contain second-round effects and bolster external buffers.