The State Bank of Pakistan will hold its fourth Monetary Policy Committee (MPC) meeting of 2026 on June 15, where the central bank will announce its next interest rate decision.
In the previous meeting held on April 27, 2026, the central bank increased the policy rate by 100 basis points, broadly matching market expectations. At that time, a survey by Topline Securities showed a majority of participants were already anticipating a rate hike amid heightened geopolitical tensions between the United States and Iran.
For the upcoming meeting, market expectations remain evenly divided between maintaining the current policy rate and another increase. With geopolitical conditions in the Middle East relatively more stable than during the last policy cycle, analysts note that uncertainty in macroeconomic signals is driving mixed expectations.
A recent Topline Securities poll shows 49% of market participants expect no change in the policy rate. Meanwhile, an equal 49% expect an increase. Within the hike expectations, 34% foresee a 50 basis point increase, while 15% expect a 100 basis point hike. Only 2% anticipate a rate cut of up to 50 basis points.
Topline Research expects the central bank to maintain the current policy rate, citing improved external stability and easing pressure in global commodity markets.
Oil price volatility remains a key factor influencing expectations. Brent crude has stayed below $100 per barrel over the past two weeks, currently trading around $93, after touching a high of $118 on April 29, 2026. Analysts say ongoing diplomatic engagement and efforts toward de-escalation have helped stabilize global energy markets.
Domestic money market indicators also suggest a cautious stance. Yields on 6-month T-bills and 6-month KIBOR stand at 12.42% and 12.50%, respectively, reflecting an increase of 92 and 106 basis points since the last MPC. According to analysts, current yields imply expectations of a modest adjustment of around 50–75 basis points.
Topline Research also surveyed market expectations for inflation, interest rates, and currency trends:
Policy Rate Outlook (December 2026):
- 53% expect rates above 11.5%
- 31% expect rates at 11.5%
- 16% expect rates below 11.5%
Inflation Expectations (FY27):
- 20% expect above 10%
- 30% expect 9–10%
- 26% expect 8–9%
- 20% expect 7–8%
- 5% expect below 7%
Despite the mixed survey results, Topline Research projects average inflation of 8–8.5% in FY27.
Exchange Rate Outlook (FY27):
- 39% expect Rs285–290 per USD
- 36% expect Rs280–285
- 15% expect Rs275–280
- 7% expect above Rs290
Overall, the survey indicates expectations of relative stability in the rupee.
Topline Research projects the PKR/USD exchange rate to remain in the range of Rs283–286 by December 2026.
