The State Bank of Pakistan (SBP) has increased its benchmark interest rate by 100 basis points, raising the policy rate to 11.5%, as the central bank tightens monetary conditions in response to mounting global and domestic risks.
The decision was announced on Monday following an extended meeting of the Monetary Policy Committee (MPC) at the SBP’s head office in Karachi, chaired by Governor Jamil Ahmed. The revised rate will take effect from April 28, 2026.
In its statement, the central bank said the move was driven by a reassessment of Pakistan’s economic outlook amid escalating tensions in the Middle East.
The SBP pointed to rising global oil prices, renewed supply-chain disruptions, and shifting inflation dynamics as key factors influencing the policy shift.
The Monetary Policy Committee decided to raise the policy rate by 100 basis points to 11.50% w.e.f 28-Apr-2026 in its meeting held on 27-Apr-2026.
— SBP (@StateBank_Pak) April 27, 2026
The MPC reviewed recent macroeconomic indicators, including inflation trends, external account pressures, and global commodity markets, before concluding that tighter monetary conditions were necessary to safeguard economic stability.
According to the SBP, the inflation outlook has become more uncertain in recent weeks, largely due to external shocks. Higher energy prices, combined with disruptions in international trade routes, are expected to exert upward pressure on domestic prices, prompting the need for a proactive policy response.
The rate hike signals a more cautious stance by the central bank as it seeks to contain inflationary risks while navigating an increasingly volatile global environment. Analysts say the decision could have implications for borrowing costs, investment activity, and overall economic growth in the months ahead.
