The State Bank of Pakistan (SBP) will announce its first monetary policy decision of 2026 later today, as financial markets anticipate a possible move into single-digit interest rates.
The Monetary Policy Committee (MPC) is meeting at the SBP head office in Karachi, where members are reviewing inflation trends, economic growth indicators, external sector performance, and financial market conditions.
SBP Governor Jameel Ahmed will formally unveil the policy decision during a press conference following the meeting.
In its final policy announcement of 2025, the central bank reduced the policy rate by 50 basis points, bringing it down to 10.5%. That cut marked a continuation of the easing cycle that began as inflation showed sustained moderation.
Since then, key economic indicators have strengthened expectations of further monetary easing.
Market Signals Point to Further Rate Cut
Economists say recent Treasury bill auctions have sent a strong signal that borrowing costs may fall further. For the first time in nearly four years, yields on government borrowing have slipped into single-digit territory.
Market surveys indicate that declining T-bill yields have reinforced expectations of another policy rate reduction in today’s announcement.
Read: SBP Surprises Markets With 50bps Policy Rate Cut to 10.5%
Analysts highlight several macroeconomic improvements that support a lower policy rate, including:
- Relative stability in foreign exchange reserves
- Sustained disinflationary trends
- A steady rise in workers’ remittances
- Improved liquidity conditions in the banking sector
Given these factors, experts believe the SBP could announce a 50- to 100-basis-point cut, potentially pushing the benchmark interest rate below 10%.
