Karachi: The State Bank of Pakistan (SBP) will announce its latest monetary policy later today (Monday) after its Monetary Policy Committee (MPC) meets to review economic conditions.
SBP Governor Jameel Ahmed will chair the meeting, where policymakers will evaluate both domestic and global economic indicators before deciding on the policy rate. After the deliberations, the central bank will issue its monetary policy statement through an official press release.
The committee will examine inflation trends, global market developments and energy price movements before finalizing its decision.
Experts largely expect status quo on policy rate
Most economists believe the central bank will maintain the current policy rate of 10.50 percent. According to a recent survey of economic experts, about 92 percent expect the SBP to keep the interest rate unchanged.
However, a small number of analysts predict a modest increase. Some experts expect the central bank to raise the policy rate by 25 to 50 basis points.
Meanwhile, about two percent of respondents believe the rate could increase by 50 to 100 basis points.
Notably, none of the economists surveyed expect the SBP to reduce the interest rate at this stage.
Rising oil prices and global tensions fuel inflation concerns
Analysts attribute the cautious outlook primarily to the sharp rise in global oil prices. Brent crude prices have climbed roughly 25 percent during the past two to three weeks.
At the same time, domestic fuel prices have surged significantly, with petrol and diesel prices increasing between 37 percent and 49 percent.
Furthermore, economists say the ongoing conflict involving Israel, the United States and Iran has disrupted global trade and heightened economic uncertainty.
Although some experts expect the conflict to ease within two to five weeks, many warn that the crisis could push global inflation higher.
Consequently, policymakers may adopt a cautious approach while assessing inflation risks and economic stability.
