SBP holds rate at 11.5%: what it means for car loans, home loans and savings

Updated 15 September 2026. This explainer was rewritten after the Monetary Policy Committee's 14 September decision, with current rates and sources.

The State Bank of Pakistan kept its policy rate at 11.5% on Monday 14 September, the third hold in a row. Seven of the ten committee members voted for the hold. The next decision is due on 26 October 2026.

The numbers that matter today

Track them daily on our KIBOR, policy rate and inflation pages.

How we got here

• December 2025: cut by 0.5 points to 10.5%.
• 26 January and 9 March 2026: held at 10.5%.
• 27 April 2026: raised by one full point to 11.5%, effective 28 April.
• 15 June, 27 July and 14 September 2026: held at 11.5%.

The April rise came as oil prices climbed with the Middle East conflict. Inflation has since moved well above the SBP's 5% to 7% target: 10.9% in April, 11.7% in May, 9.2% in July and 11.1% in August.

Why the SBP did not move

The committee pointed to high global oil prices from Middle East tensions and supply disruption, while saying domestic data was in line with its expectations and that strong remittances and financial inflows were containing pressure on the external account. It expects inflation to ease towards the upper end of the 5% to 7% range by June 2027, growth of 3.5% to 4.5% in FY27, and reserves (now about $21.4 billion) to approach three months of imports by June 2027.

What it means for your car loan

Car loans are priced at 1-year KIBOR plus a bank spread, commonly quoted at about 2.5 to 5 percentage points. With KIBOR at 12.30%, that puts most new car financing at roughly 14.8% to 17.3%. SBP rules cap auto finance at Rs 3 million per person with at least 30% down.

On a Rs 3 million loan over five years:

Every 1 point rise in KIBOR adds about Rs 1,590 a month to that loan. If yours is a floating-rate loan, it re-prices at the next reset date, usually every six or twelve months. Run your own numbers in the car loan calculator.

What it means for your home loan

Home finance also floats on KIBOR, but over up to 20 years, so small moves hurt more. On a Rs 10 million, 20-year loan at 15.3%, the instalment is about Rs 133,901, and a 1 point rise adds roughly Rs 7,480 a month. Try it in the home loan calculator.

What it means for your savings

Banks must pay a minimum profit on savings accounts that is linked to the SBP rate. Since 1 August 2026 that protection applies only to individuals with a monthly average balance of up to Rs 10 million; companies and institutions are no longer covered. With inflation at 11.1%, a savings account paying close to 10% is losing value in real terms, so compare it with National Savings certificates in the national savings calculator.

What to do now

1. Floating loan? Check your next reset date and budget for the current KIBOR, not the rate you signed at.
2. Planning a car purchase? Ask at least three banks for their spread over KIBOR. A 1 point lower spread saves about Rs 1,590 a month on Rs 3 million.
3. Holding cash? Make sure it earns at least the savings floor, and look at fixed-return options while rates are high.
4. Watch 26 October. With inflation above 11%, a cut is unlikely soon; the risk of another rise depends on oil prices.