KARACHI: With Pakistan’s central bank set to announce its latest monetary policy decision June 15, a new survey shows market participants nearly evenly divided over whether interest rates will rise or hold steady reflecting deep uncertainty over oil price volatility and geopolitical tensions.
The State Bank of Pakistan’s Monetary Policy Committee will meet for the fourth time this year, following a 100-basis-point hike in late April. That increase, which brought the policy rate to 11.5%, was widely expected at the time due to heightened U.S.-Iran tensions.
But according to a poll conducted by Topline Securities, 49% of respondents expect the policy rate to remain unchanged at the upcoming meeting, while another 49% anticipate an increase, including 34% who forecast a 50-basis-point hike and 15% who expect a 100-basis-point hike. Just 2% of participants predicted a cut of up to 50 basis points.
Topline’s own research team said it expects the central bank to hold rates steady, citing diplomatic efforts to de-escalate regional hostilities and active mediation by Pakistan.
The report also noted that US President Donald Trump has repeatedly assured an early resolution to the conflict, helping keep Brent crude below $100 a barrel for the past two weeks. Brent touched a high of $118 on April 29 and was trading at roughly $93 at the time of the report.
Secondary market yields also suggest a smaller hike than the previous meeting. The yield on six-month Treasury bills stood at 12.42% and the six-month Karachi Interbank Offered Rate at 12.50%, up 92 and 106 basis points respectively since the last policy announcement. Topline said those levels imply the market is pricing in a hike of 50 to 75 basis points.
Looking further ahead, the poll found that 53% of respondents expect the policy rate to remain above 11.5% by December 2026, while 31% expect it to stay at the current level and 16% forecast a rate below 11.5%.
On inflation, 30% of participants expect average consumer prices in fiscal year 2027 to land between 9% and 10%, while 26% forecast 8% to 9% and 20% expect 7% to 8%. Topline said it expects inflation to average 8% to 8.5% in fiscal year 2027.
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On the currency, 39% of respondents see the Pakistani rupee trading between 285 and 290 against the U.S. dollar by the end of fiscal year 2027. Another 36% expect an exchange rate of 280 to 285, while 15% forecast a stronger rupee of 275 to 280. Topline said it expects the rupee to trade at 283 to 286 per dollar by December 2026.
