Market expects status quo as MPC meets today

Business Recorder reported that the State Bank of Pakistan (SBP) Monetary Policy Committee convenes today, Monday, for its second session of the fiscal year. A majority of market participants expect the benchmark rate to stay at 11.5%, the same level held on July 27. Back then, the committee kept rates steady even though the macroeconomic picture had brightened, pointing to external risks from renewed hostilities in the Middle East.

Ismail Iqbal Securities also expects a hold, noting that costlier global crude could restrict room for easing. A Topline Securities poll found that 84% of respondents expect no change, while 14% foresee a 50bps increase and 2% a 100bps rise. JS Global also expects an unchanged rate, but says an increase would become the next step should geopolitical strains continue through the December quarter.

Oil at $95 per barrel keeps annual inflation expectations largely below 9% for FY27 on average, which implies a real spread over 250bps. Topline points to the recent $3 billion Eurobond launch, alongside improving reserves and a contained current account, as support for a hold. Topline also warns that if oil and food inflation stay sticky, a hike of 50bps to 100bps could arrive at the October or December 2026 meetings.