The State Bank of Pakistan (SBP) is widely expected to leave its benchmark policy rate unchanged at 11.5 percent when its Monetary Policy Committee (MPC) meets on July 27, according to a survey conducted by Topline Securities.
The survey found that 97 percent of respondents expect no change in the policy rate, while only 3 percent anticipate a 100-basis-point reduction.
Topline Research also expects the central bank to maintain the current rate, citing renewed geopolitical tensions and higher global oil prices despite inflation remaining under control.
The SBP last reviewed monetary policy on June 15, when it kept the benchmark interest rate unchanged at 11.5 percent. Market expectations briefly shifted toward aggressive monetary easing after easing tensions between the United States and Iran pushed international oil prices lower. At the time, investors had priced in cumulative rate cuts of 100 to 150 basis points over the next few policy meetings.
However, renewed geopolitical uncertainty and the subsequent rise in oil prices have reduced expectations of an early rate cut.
The shift in sentiment has also been reflected in the debt market. The yield on six-month Treasury bills fell from 12.46 percent before the previous MPC meeting to 11.30 percent in early July before climbing back to around 11.5 percent over the past 10 days. Meanwhile, the six-month Karachi Interbank Offered Rate (KIBOR) is hovering near 11.67 percent.
Looking ahead, market participants remain divided over the policy outlook for the rest of the year. Nearly half of respondents expect the policy rate to remain at 11.5 percent through December 2026, while 46 percent anticipate further monetary easing. Only 6 percent expect the central bank to raise interest rates.
Topline Research, however, expects the policy rate to decline below 11.5 percent by the end of the year.
The survey also showed varying inflation expectations for FY2026-27. Around 34 percent of respondents forecast average inflation between 8 and 9 percent, while 31 percent expect it to range from 9 to 10 percent. Another 29 percent see inflation averaging between 7 and 8 percent. Topline expects inflation to remain within the 7 to 8 percent range during the fiscal year.
On the currency front, respondents largely expect the Pakistani rupee to remain stable. Nearly half forecast the exchange rate to stay between Rs. 280 and Rs. 285 per US dollar by the end of 2026, while about one-third expect it to trade between Rs. 285 and Rs. 290. Topline Research also projects the rupee to remain in the Rs. 280-285 range by year-end.
