The Monetary Policy Committee (MPC) of the State Bank of Pakistan meets today to decide on the second Policy Rate for 2026. The meeting comes amid rising global oil prices and increasing regional tensions.
In January, the central bank surprised markets by keeping the policy rate unchanged at 10.5%. Many analysts had expected a reduction to stimulate economic growth, but the MPC chose caution given rising inflation concerns.
Now, investors and policymakers are closely watching whether the central bank will maintain the same rate during its second Policy Rate review. Rising geopolitical risks and volatile energy prices have shifted market expectations. Most analysts predict the MPC will hold rates steady.
Karachi-based brokerage firms reported that the central bank is likely to adopt a cautious stance. Topline Securities indicated that 96% of participants in a recent survey anticipate no change in the benchmark rate, citing inflationary pressures.
Escalating tensions in the Gulf region have pushed Brent crude oil prices up by nearly 25% over the past two to three weeks. This surge has intensified fears of renewed inflation and limited the central bank’s room to lower borrowing costs.
During the January MPC meeting, headline inflation stood at 5.6% year-on-year, while core inflation remained elevated at 7.4%, highlighting persistent underlying price pressures. February 2026 data showed headline inflation rising to 7%, the highest since October 2024, signaling further economic risk.
Analysts believe that today’s second Policy Rate decision will balance the need to support economic growth while keeping inflation in check. Any change or continuation of the current rate will impact borrowing costs, business planning, and investment decisions across Pakistan.
With energy prices high and geopolitical tensions intensifying, the MPC is expected to maintain caution. Central bank officials have emphasized that keeping the rate steady at 10.5% may be necessary to stabilize inflation expectations and manage the evolving economic landscape.
Investors, businesses, and policymakers are monitoring today’s decision closely, as the second Policy Rate review will set the tone for Pakistan’s monetary policy amid rising inflation and global uncertainty.
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