Researchers and analysts suggest that Pakistan’s State Bank faces challenges due to rising global fuel prices from the prolonged Gulf war, leading to an anticipated policy rate announcement this coming Monday. The current interest rate stands at 11.5%, with expectations divided between a potential 50 basis point increase by institutional traders and predictions of no change based on long-term economic considerations. Analysts like Faisal Mamsa of Tresmark emphasize that while Pakistan’s inflation is climbing back to double digits, the SBP must also respond to global economic pressures affecting interest rates worldwide.
Written by the local model on 2026-09-13,
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Story summary
The State Bank of Pakistan (SBP) faces tough decisions regarding its interest rates amid rising inflation and global economic uncertainties. On April 27, the SBP raised its policy rate to 11.5% by increasing it by 100 basis points in response to soaring fuel prices due to the ongoing Gulf conflict. The war has escalated to the Red Sea, pushing oil prices above $100 per barrel, complicating supply chains and exacerbating inflationary pressures.
Ahead of the upcoming Monetary Policy Committee (MPC) meeting on Monday, institutional traders predict a further hike of 50 basis points. However, other analysts argue for maintaining the status quo due to concerns about stifling economic growth in Pakistan compared to competitive markets. The SBP is caught between balancing inflation control and sustaining economic activity, making its next move highly anticipated but also challenging.
Written for “Economic Inflation Concerns” on 2026-09-14,
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No political leaning scored for article 8602 · logged 2026-09-13
Pakistan and other regional states are unable to adopt a clear position on economic and monetary policies due to the prolonged Gulf war, which has driven up fuel prices, according to researchers and analysts.
uncertain
which → adopt → researchers
An increase in inflation in 2026-27 and a global trend of higher interest rates have also forced the State Bank of Pakistan to take cautious steps regarding the policy rate to be announced at the next meeting of the monetary committee on Monday.
asserted
increase → force → Monday
The current interest rate is 11.5 per cent, but trade and industry think it is high compared to competitive markets.
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it → think → markets
Bankers anticipate a status quo, but some analysts believe the central bank will lift its policy rate by 50 basis points at the Monetary Policy Committee meeting.
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bank → anticipate → meeting
Institutional traders expect 50bps rate hike; analysts see status quo
The SBP raised its policy rate to 11.5pc by 100bps on April 27 in response to rising global energy prices and supply chain risks.
As the war in the Gulf expands to the Red Sea, fuel prices have shot above $100 as constant attacks have made it impossible for oil tankers to cross the route.
asserted
tankers → expect → route
Some analysts said the State Bank is in a difficult position on tightening its monetary policy stance amid rising inflation.
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Bank → say → inflation
However, the SBP is believed to prefer maintaining the status quo.
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SBP → believe → quo
Inflation returned to double digits to 11.1pc in August after falling to 9.2pc in July.
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Inflation → return → July
A senior banker said the State Bank must consider long-term prospects and could decide to counter inflationary pressure with a slight interest-rate hike.
uncertain
Bank → say → hike
It may be about everybody else’s inflation problem,” said Faisal Mamsa, CEO of Tresmark.
uncertain
Mamsa → say → Tresmark
For instance, the global markets are going awry.
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markets → go → instance
Brent is above $105, the ECB (European Central Bank) has raised rates by 25bps, global bond yields have surged, and US inflation remains elevated around the 3.4pc mark.
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inflation → raise → mark
“None of these problems started in Pakistan, but the SBP may increasingly have to respond to them,” he said.
uncertain
he → start → them
A poll conducted by Tresmark on Wednesday showed 20pc of institutional traders expecting a 50bps rate hike in Monday’s MPC.
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20pc → conduct → MPC
“Two weeks ago, we stated that the status quo was probably the best-case scenario for the September MPC.
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quo → state → MPC
We still think it is,” said Mr Mamsa.
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Mamsa → think → ?
Bloomberg Economics and BMI have now moved to a similar view, expecting no change on Monday but growing upward pressure on rates going forward.
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Economics → move → rates
