SBP keeps interest rate steady at 11.5% amid mixed market expectations

KARACHI: The State Bank of Pakistan’s Monetary Policy Committee kept its benchmark policy rate unchanged at 11.5% on Monday, pausing after a rate hike at its previous meeting.

The decision, the fourth MPC meeting this year, came as market analysts were divided over the central bank’s next move.

In April, the committee raised the rate by 100 basis points to 11.5%, a move that aligned with expectations.

Ahead of the June 15 meeting, brokerage house Topline Securities reported sharp divisions in market sentiment. In a poll conducted by the firm, 49% of respondents expected no change in the policy rate, while 49% predicted an increase — including 34% forecasting a 50-basis-point hike and 15% expecting a 100-basis-point increase. Only 2% anticipated a cut of up to 50 basis points.

“The uncertainty/mixed view over rate change expectations is primarily driven by high volatility in oil prices,” Topline said in a note. “Our view of the status quo is backed by efforts and steps taken by involving parties in the war and active mediation by Pakistan.”