Karachi: The State Bank of Pakistan (SBP) has announced an increase in the policy rate by 100 basis points, bringing it to 11.5%. This move, set to take effect on April 28, 2026, is a response to rising inflationary pressures linked to geopolitical tensions in the Middle East and disruptions in global supply chains, which have affected energy prices, freight charges, and insurance premiums.
According to JS Global, the decision was made by the Monetary Policy Committee as headline inflation climbed to 7.3% in March 2026, with core inflation reaching 7.8%. The bank anticipates further increases in inflation, remaining above the targeted range of 5-7% in the near term due to persistent global energy costs and supply chain issues. However, the SBP aims to anchor inflation expectations through its tighter monetary stance.
The central bank also projects foreign exchange reserves to reach approximately $18 billion by the end of the fiscal year 2026, with remittances estimated at around $41 billion, which is $1 billion lower than previous forecasts. Despite these adjustments, the SBP expects external financing needs to remain manageable.
The rate hike is expected to benefit mid-tier banks such as BAHL, BAFL, HMB, FABL, and AKBL, as well as MCB. Conversely, it is likely to have negative implications for leveraged companies, including EPCL, DGKC, MLCF, ILP, and AGP, among others.
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