# SBP policy rate decision tomorrow, 26 October: 50bps hike to 12% now expected

Source: Searchable (https://searchable.pk/news/economy/sbp-policy-rate-decision-26-october)
Type: News article
Author: Searchable Editorial
Published: 4 Oct 2026
Updated: 25 Oct 2026
Retrieved: 25 Oct 2026

> Bankers and analysts expect the State Bank to raise the rate from 11.5% on Monday as oil and inflation climb. What a rise would do to your loan instalment and your savings.

**Update, 25 October 2026:** the State Bank of Pakistan's Monetary Policy Committee meets **tomorrow, Monday 26 October**, and most financial experts now expect a **50 basis point rise to 12%** from 11.5%, [Dawn reported](https://www.dawn.com/news/2039576/stakeholders-see-monetary-tightening-tomorrow) today. Earlier this month the market expected a hold. If the rate goes up, car loans, home loans and running finance get dearer from their next KIBOR reset, and bank deposits and savings should pay a little more.

## What the market expects now

| View | Who | Expected move |
|---|---|---|
| "Sure of a 50bps increase", though the market needs 100bps to tame inflation | Rashid Masood Alam, senior banker | +0.50% |
| 50bps is "the sensible middle ground"; 100bps would raise borrowing costs for little extra benefit | Faisal Mamsa, CEO, Tresmark | +0.50% |
| Raising rates will not control this inflation | Saleem Mukati, Pakistan Chemicals and Dyes Merchants Association | Against a hike |
| Cut rates to single digits | Korangi Association of Trade and Industry, SITE Association of Industry | A cut |

**Why the change of mood:** inflation averaged **10.2%** in July to September (the first quarter of FY27), against 4.3% a year earlier, and oil imports have become costlier with the war in the Middle East and the risk of US strikes on Iran. Dawn also notes that the Reserve Bank of India and other central banks have already raised rates.

## The numbers behind the decision

| | Latest | Source |
|---|---|---|
| SBP policy rate | 11.5% | [SBP policy rate](/data/sbp-policy-rate) |
| 12-month KIBOR (offer) | 12.75% (25 October) | [KIBOR 1 year](/data/kibor-1y), SBP |
| Inflation (CPI, September 2026) | 10.3% year on year, down from 11.1% in August | [CPI](/data/cpi-yoy), PBS |
| Inflation, July to September average | 10.2% | Dawn |
| SBP medium-term inflation target | 5% to 7% | Dawn |

With inflation at 10.3% and the policy rate at 11.5%, the real rate is only about 1.2 percentage points. KIBOR at 12.75% already sits above the policy rate, so banks have partly priced a rise in.

## What it means for your loan

Most car and home loans in Pakistan reset to KIBOR plus a bank's spread every six or twelve months. If your loan resets in November or December, a 0.5 point rise in the policy rate would feed through KIBOR into your new instalment.

**Example:** on a Rs 3 million car loan over five years, every 1 percentage point on the rate adds roughly Rs 1,500 to Rs 1,600 (at rates between 12% and 17%) to the monthly instalment, so a 0.5 point rise adds roughly Rs 750 to Rs 800. Put your own figures into our [car loan calculator](/tools/cars/car-loan-calculator), [home loan calculator](/tools/finance/home-loan-calculator) or [personal loan calculator](/tools/finance/personal-loan-calculator).

## What it means for savers

Higher rates keep returns on savings up. National Savings profit rates were revised on 1 October; see [what Behbood and other schemes now pay](/news/economy/national-savings-profit-rates-up-from-1-october-behbood-now-rs-1060-a-month-per) and work out your monthly profit with the [National Savings calculator](/tools/finance/national-savings-calculator).

## Earlier: the 4 October view

On 4 October [Dawn reported](https://www.dawn.com/news/2034576) that analysts expected the rate to stay at 11.5%, with Tresmark's Faisal Mamsa saying the authorities expected inflation to average around 7.5% if oil fell back towards $80 a barrel and around 8.2% if it stayed near $100.

We will update the [policy rate page](/data/sbp-policy-rate) on 26 October as soon as the SBP announces its decision.

## Frequently asked questions

**When is the next SBP monetary policy meeting?**

Monday 26 October 2026. Most experts quoted by Dawn on 25 October expect a 50 basis point rise to 12%.

**What is the current SBP policy rate?**

11.5%. The 12-month KIBOR offer rate was 12.75% on 25 October 2026.

## Sources

- Stakeholders see monetary tightening tomorrow (Dawn): https://www.dawn.com/news/2039576/stakeholders-see-monetary-tightening-tomorrow
- Tight monetary policy likely to continue (Dawn): https://www.dawn.com/news/2034576
- Govt raises petrol price by Rs2.10 per litre, high-speed diesel by Re0.30 per litre (Dawn): https://www.dawn.com/news/2034287/govt-raises-petrol-price-by-rs210-per-litre-high-speed-diesel-by-re030-per-litre
- KIBOR index (State Bank of Pakistan): https://www.sbp.org.pk/ecodata/kibor_index.asp

How to cite: "SBP policy rate decision tomorrow, 26 October: 50bps hike to 12% now expected", Searchable, 25 Oct 2026, https://searchable.pk/news/economy/sbp-policy-rate-decision-26-october