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SBP Expected to Hold Policy Rate at 11.5% in September Meeting

A survey by Arif Habib Limited indicates 87.5% of respondents expect the State Bank of Pakistan to keep the policy rate unchanged at 11.5% on 14 September, amid a narrowing current‑account deficit and rising remittances.

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SBP Expected to Hold Policy Rate at 11.5% in September Meeting — Banks, Economy, Markets | Shariah PSX

Desk Analysis

How This Affects the Exchange

Sector Effect

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Stable policy rate creates mixed signals for banks and borrowers; watch for inflation trends before forming a bias.

Sectors & Direction

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Mentions in This Briefing

Sectors: Banks, Economy, Markets — Neutral · Watch. PSX tickers: KEL. Stable policy rate creates mixed signals for banks and borrowers; watch for inflation trends before forming a bias.

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## Policy Rate Outlook

The State Bank of Pakistan (SBP) is projected to maintain its benchmark policy rate at 11.5% during the monetary policy meeting scheduled for 14 September 2026. This expectation is based on a recent survey conducted by Arif Habib Limited (AHL), where 87.5% of participants anticipated no change, while 12.5% foresaw a possible 50‑basis‑point hike.

## Economic Backdrop

- Current‑account deficit: Narrowed by 38% YoY to USD 328 million in July, reflecting improved trade and services balances. - Remittances: Rose 13% YoY to USD 3.6 billion, providing a strong foreign‑exchange inflow. - Fiscal position: Pakistan posted a primary fiscal surplus of 2.9% of GDP in FY26, surpassing the IMF’s target. - Inflation: Consumer price index (CPI) inflation accelerated to 10.18% in the first two months of FY27, up from 3.56% a year earlier. SBP is likely to monitor whether this rise becomes broad‑based before adjusting rates. - Growth: Large‑scale manufacturing expanded by roughly 5% in FY26, marking the sector’s strongest performance in about four years.

## Market Implications

The decision to keep rates steady would preserve the current cost of borrowing for corporates and households, while maintaining the interest‑rate spread that banks earn on loans versus deposits. However, persistent inflation could pressure the SBP to reconsider in future meetings.

## Outlook

Investors should watch upcoming inflation data and any further fiscal developments, as these will shape SBP’s next policy move.