Market analysts expect the State Bank of Pakistan (SBP) to keep the policy rate unchanged at 10.5% in its upcoming Monetary Policy Committee (MPC) meeting to be held on Monday.
“The world is negotiating peace amid uncertainty; therefore, at a time like this, we believe policy must continue to lean toward discipline over impulse. We expect the SBP to keep the policy rate unchanged at 10.5% in the Apr’27 MPS,” said Arif Habib Limited (AHL) in its report.
AHL was of the view that global conditions have stayed unsettled, with US–Iran tensions continuing to steer sentiment. “In this environment, oil has remained a swing factor, sharp enough to move markets, but not stable enough to define a clear trend.”
It said that all this external noise has filtered into domestic prices, but without destabilising the broader inflation narrative. Transport inflation has seen sharp bursts, i.e. 12% MoM in March, and is expected to be around 15% in April, yet the spillover remains contained, with no meaningful evidence of second-round pressures building up, it noted.
“Looking ahead, the expected move in CPI toward double digits in 4QFY26 is largely a base-effect story, transient in nature and driven more by energy pass-through than any demand-side overheating.
“Beyond this short-lived spike, assuming external conditions remain stable, our base case remains intact, with inflation averaging 7.1% in FY26 and 8.5% in FY27, while core inflation stays contained at 8%,” it said.
Last month, SBP decided to keep its benchmark policy rate unchanged at 10.5%.
The decision was in line with market expectations, which anticipated the central bank to maintain the status quo in the wake of escalating geopolitical tensions in the Middle East, which have swelled energy prices, raising fears of a new wave of inflation.
Meanwhile, AHL, citing its survey, shared that 61% expect no change, 19% anticipate a 50bps hike, 17% a 100bps hike, and 3% a 150bps increase.
“For now, patience remains the more prudent choice. Let the talks conclude. Let outcomes take shape.
“The next policy in Jun’26, alongside the federal budget, will offer a clearer landscape for recalibration if required,” it concluded.
Waqas Ghani, Head of Research at JS Global, also resonated with AHL expectations.
“The central bank might actually do nothing at the upcoming meeting. They could hike rates, but most financial institutions we surveyed are betting on zero change,” Ghani wrote in a social media post.
Ghani noted that uncertainty around how prolonged the regional conflict may be continues to cloud the outlook, particularly given the unclear duration and inflationary impact of energy prices.
“Our recent survey of financial institutions and high-net-worth clients suggests mixed expectations of a 0–100bps increase in the policy rate, with a majority voting for no change in rate in the upcoming meeting,” he said.
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