Business Recorder
KARACHI: The State Bank of Pakistan (SBP) is scheduled to hold the third Monetary Policy Committee (MPC) meeting of 2026 on April 27, to review the key policy rate amid evolving macroeconomic and external conditions. Amid regional turmoil and shifting economic signals, expectations of a rate hike have increased in market circles. A poll conducted by Topline Securities shows a divided outlook among participants, with 53 percent expecting a rate increase. Within this group, 41.2 percent anticipate a hike of 50-100 basis points, followed by 10 percent expecting an increase of 25-50 basis points, while 2 percent foresee a larger hike of more than 100 basis points. READ MORE: SBP holds policy rate at 10.5% amid Middle East tensions Of the remaining 47 percent of the participant, 43 percent expect no change in policy rate, while 4 percent expect rate to decline by 50-100bps. In previous poll, 92 percent were expecting rates to remain unchanged as turmoil was in its initial days, however, now it’s been around 2 months (55 days) since this war has out broken. Topline attributed change in participants view from no change in Mar MPC to interest rate hike in April MPC to elevated global crude oil prices and uncertainty over the longevity of the war. Topline securities expect interest rates to increase by 50bps in current monetary policy to absorb the impact of rising oil prices, and its indirect/lagged impact on other commodities and to contain nonessential imports. On question related to longevity of the conflict between Israel /US and Iran, the 54.9 percent believe, this issue could still take more than 2 weeks to resolve. While 20 percent consider this as an evolving issue with no definitive time to resolution. However, 26 percent believe, this could resolve in less than 2 weeks. The secondary market yields of 6M T-bills and 6M KIBOR are hovering at 11.22 percent and 11.44 percent, respectively compared to policy rate of 10.5 percent. This suggests market expectations of a smaller rate hike. To highlight in last few weeks t bill and KIBOR touched peak of 11.78 percent and 11.79 percent, respectively and later fell after announcement of the ceasefire. On the question related to interest rate target for Dec 2026, 59 percent believe that policy rate will remain above 10.5 percent, 29 percent expect policy rate at 10.5 percent (current level) and 6 percent expect policy rate at 10 percent or below. On Inflation side, 51 percent of the respondents believe that inflation will remain above 9 percent over next 12 months and 23 percent expect this to remain in range of 7-9 percent. On currency side, 59 percent believe PKR/USD parity to remain above 285, while 31 percent expect this to remain in range of Rs280-285 and 10 percent at Rs275-280. Copyright Business Recorder, 2026
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