# SBP rate decision on 26 October: policy rate expected to stay at 11.5%, no relief for loans yet

Source: Searchable (https://searchable.pk/news/economy/sbp-rate-decision-on-26-october-policy-rate-expected-to-stay-at-115percent-no)
Type: News article
Author: Searchable Editorial
Published: 4 Oct 2026
Updated: 4 Oct 2026
Retrieved: 4 Oct 2026

> Inflation fell to 10.3% in September, but analysts expect the State Bank to hold rates on 26 October. Here is what that means for your car or home loan instalment.

The State Bank of Pakistan's next interest rate decision is due on **26 October 2026**, and analysts expect the policy rate to stay at **11.5%**, [Dawn reported](https://www.dawn.com/news/2034576) on 4 October. For anyone with a car loan, a home loan or a running finance line, that means no relief on monthly instalments this month, and possibly a small rise.

## The numbers behind the decision

| | Latest | Source |
|---|---|---|
| SBP policy rate | 11.5% | [SBP policy rate](/data/sbp-policy-rate) |
| 12-month KIBOR (offer) | 12.64% | [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 |
| One-year T-bill cut-off (last auction) | 12.49% | Dawn |
| SBP medium-term inflation target | 5% to 7% | Dawn |

Inflation has eased, but at 10.3% it is still above the policy rate, and well above the 5% to 7% target. Yields in last week's T-bill auction rose by up to 75 basis points, a sign that banks expect rates to stay high. Tresmark chief executive Faisal Mamsa told Dawn that the authorities reportedly expect inflation to average around 7.5% if oil falls back towards $80 a barrel, and around 8.2% if it stays near $100.

## Why a cut is unlikely on 26 October

- **Oil.** Fuel prices are set daily and petrol is at Rs 392.76 a litre ([PSO ex-depot Karachi](/data/petrol-price)), up from Rs 266 in early March. Every rise feeds into transport and food costs.
- **Real rate.** With inflation at 10.3% and the policy rate at 11.5%, the real rate is only about 1.2 percentage points. Cutting now would push it close to zero.
- **Market pricing.** KIBOR at 12.64% sits above the policy rate, and banks price most consumer loans off KIBOR, not the policy rate.

## 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, use today's KIBOR, not the rate on your original offer letter.

**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. 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) to see your reset.

## What it means for savers

High 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).

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?**

The State Bank of Pakistan's Monetary Policy Committee is due to announce its next decision on 26 October 2026, according to Dawn.

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

11.5%. The 12-month KIBOR offer rate is 12.64% (4 October 2026).

## Sources

- 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 rate decision on 26 October: policy rate expected to stay at 11.5%, no relief for loans yet", Searchable, 4 Oct 2026, https://searchable.pk/news/economy/sbp-rate-decision-on-26-october-policy-rate-expected-to-stay-at-115percent-no