Interest Rate in Pakistan 2026: SBP Policy Rate Update
The interest rate Pakistan benchmark set by the State Bank stands at 11.5% as of 15 October 2026, after the Monetary Policy Committee held the rate unchanged at its 14 September 2026 meeting. Seven of the committee’s ten members voted to hold, weighing steady domestic economic data against rising inflation risk from the intensifying Middle East conflict. The interest rate Pakistan had last moved on 27 April 2026, when the central bank raised the policy rate by 100 basis points to reach the current 11.5% level.
Interest Rate Pakistan: SBP Policy Decision
The September hold continued the central bank’s cautious stance: the SBP had also kept the rate unchanged in June, while a Monetary Policy Committee meeting was held in July. The committee said the prolonged Middle East conflict had pushed already elevated global commodity prices higher and prolonged supply-chain disruptions, keeping energy inflation elevated. Headline inflation rose to 11.1% year-on-year in August, up from 9.2% in July, driven largely by higher food prices, particularly wheat and other staples, alongside elevated energy costs. Core inflation stood at 8.7%. Money-market cut-off yields on Treasury bills have hovered near the policy rate, with 12-month paper around 12.5%, signalling that traders expect rates to stay elevated for now. The interest rate Pakistan outlook therefore remains data-dependent, with the next policy decision scheduled for 26 October 2026.
KIBOR, Corridor and Loan Rates
The policy rate anchors the interest-rate corridor: the overnight reverse-repo ceiling stands at 12.50% and the floor at 10.50%, with the weighted-average overnight repo rate at 11.56% as of 13 October. Karachi Interbank Offered Rates on 14 October were quoted at 11.72/11.97 for three months, 12.17/12.42 for six months and 12.24/12.74 for twelve months. Banks price consumer and business loans off KIBOR plus their own spread, so the rate borrowers actually pay sits above the policy benchmark. A hold in the policy rate means loan instalments stay roughly where they are; only an actual cut reduces monthly payments.
What Savers and Borrowers Should Do
With the benchmark at 11.5%, savers continue to earn historically attractive returns on term deposits and national savings schemes, though returns are eroded by 11.1% inflation. Borrowers should know that only the spread above KIBOR is negotiable with their bank, since the policy rate itself is set by the central bank. Anyone with a variable-rate loan may want to review their terms before the 26 October decision, because the rate picture could change if inflation surprises again. For the price backdrop, see our inflation in Pakistan coverage, the KSE-100 index page for market reaction, and currency rates for the rupee angle.
National savings schemes typically follow the policy rate with a lag, so certificate and account profit rates are worth rechecking after every MPC decision. Fixed-income investors often ladder deposits across three, six and twelve months to stay flexible, while long-term borrowers sometimes prefer fixed-rate products when they believe rates have peaked. None of this is financial advice; personal circumstances and the fine print of each product matter more than any headline rate.
External sources: the rate-impact explainer at PakEra and the September decision report at Origin Pakistan.
Frequently Asked Questions
What is the interest rate Pakistan policy rate now?
The State Bank’s policy rate is 11.5%, held at the Monetary Policy Committee meeting of 14 September 2026, which defines the national benchmark.
When is the next SBP policy decision?
The next Monetary Policy Committee meeting is scheduled for 26 October 2026, the key date for the interest rate Pakistan outlook.
What is KIBOR?
KIBOR is the rate banks charge each other for lending, anchored by the policy rate. Most loans are priced off KIBOR plus a bank spread, so the rate borrowers face exceeds 11.5%.
Does a rate hold change my loan instalment?
No. A hold keeps instalments roughly unchanged; only a cut in the interest rate Pakistan benchmark lowers monthly payments.
What was inflation in August 2026?
Headline inflation was 11.1% year-on-year in August, up from 9.2% in July, which is why the stance stayed cautious.
In-Depth Explainer: Interest Rates in Pakistan
The interest rate Pakistan benchmark — the SBP policy rate — shapes borrowing costs across the economy. Checking the sbp policy rate today figure matters for anyone with a loan, a business, or savings.
What is the current SBP policy rate?
The sbp policy rate today is set by the Monetary Policy Committee, which meets every six to eight weeks. Decisions balance inflation control against growth support.
How has Pakistan’s interest rate moved historically?
Pakistan interest rate history shows dramatic cycles: single-digit rates during stable periods, spiking above 20% during the recent inflation crisis, then easing as inflation cooled. Each cycle reshaped business investment.
How do rate changes affect loans?
How interest rate affects loans: a one-point policy cut typically lowers KIBOR-linked business and consumer loan rates within weeks, reducing monthly instalments. Savers earn less on deposits, pushing some toward equities.
When is the next SBP monetary policy announcement?
The sbp monetary policy announcement calendar is published in advance. Markets watch the statement’s language on inflation expectations as closely as the rate decision itself.
What should borrowers do?
With the interest rate Pakistan outlook in mind, borrowers should compare fixed versus floating options and avoid over-leveraging when rates are at cyclical lows.
Fixed vs floating loans
When the interest rate Pakistan outlook is uncertain, borrowers must choose: fixed rates cost more but give certainty, floating rates follow the interest rate Pakistan cycle. Match the choice to your risk tolerance.
Savers’ strategy
High interest rate Pakistan periods reward term deposits and T-bills. Lock in rates when the interest rate Pakistan cycle peaks — cuts usually follow.
Reading MPC statements
The sbp monetary policy announcement statement’s forward guidance hints at future moves. Learning to read interest rate Pakistan signals helps businesses time borrowing decisions.
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