KARACHI – The State Bank of Pakistan is set to announce the first monetary policy of the year 2026 today (Monday), with expectations of a reduction in the key interest rate, potentially bringing it into single digits.
The Monetary Policy Committee will convene at the central bank’s headquarters in Karachi to evaluate economic indicators and inflation trends before determining the new policy rate.
In the last monetary policy announcement in December 2025, the central bank reduced the interest rate by 0.5% to 10.5%.
Experts suggest that the recent treasury bills auction indicates a potential cut in the policy rate. For the first time in four years, the government’s borrowing rate from banks has dropped to a single-digit figure.
Surveys indicate that the stabilization of foreign exchange reserves, control over inflation, and growing remittances may prompt the State Bank to reduce the key rate by 0.5 to 1 percentage point.
