Karachi : April 27, 2026: The State Bank of Pakistan (SBP) has set a stage for making Pakistan’s economy hostage to the banking mafia by increasing policy rate by 100 basis points.
The same SBP had downed the policy rate in phases by 1100 basis points in I year in the intervention by the powerful circle Last year . It again found an opportunity in the fallout of the ME war to make the national economy hostage to the banking mafia.
Only 1 % increase in the policy rate will add hundreds of billion of rupee the government in interest to be paid to the banks. The government is a major borrower of the commercial banks’loan.
The SBP issued the following statement to justify its anti business and anti Pakistan policy of increasing the interest rate by 1 % on Monday.
1. The Monetary Policy Committee (MPC) in its meeting today decided to increase the policy rate by 100
bps to 11.50 percent with effect from April 28, 2026. The Committee noted that prolonging of the Middle
East conflict has intensified risks to the macroeconomic outlook. In particular, the global energy prices,
freight charges and insurance premiums continue to remain significantly above pre-conflict levels.
Furthermore, the supply chain disruptions have contributed to the prevailing uncertainty. While the incoming
data has been broadly in line with the MPC’s expectations so far, the impact of these global developments will
be visible in key economic indicators going forward. In this backdrop, the Committee assessed that inflation
is likely to increase and remain above the target range in the next few quarters. Accordingly, the MPC deemed
it necessary to maintain a tighter policy stance to keep inflation expectations anchored and contain second-
round effects of the current supply shock to bring inflation within the target range. This will be important to
preserve macroeconomic stability, which is necessary for achieving sustainable economic growth.
2. Apart from the geopolitical events in the Middle East, the MPC noted the following key developments
since its last meeting. First, inflation rose to 7.3 percent in March, while core inflation inched up to 7.8
percent. Second, inflation expectations and confidence of consumers and businesses deteriorated in the latest
surveys. Third, real GDP grew by 3.8 percent in H1-FY26 as compared to 1.9 percent in the same period last
year.
Fourth, the current account posted a small surplus during July-March FY26. Fifth, despite significant
debt repayments, SBP’s FX reserves as on April 24, 2026 are around $15.8 billion, supported by the issuance of Eurobonds, as Pakistan re-entered international capital markets after a gap of over four years. Lastly, the staff level agreement was reached with the IMF on March 27, 2026.
3. In light of the above developments and evolving risks, the MPC viewed today’s decision as important
to achieve the objective of price stability over the medium term. The Committee reiterated the important role
of the continued build-up of external buffers and fiscal discipline. These efforts have contributed to stronger
initial economic conditions at the start of the ongoing geopolitical conflict as compared to similar shocks in
the recent past. The MPC also emphasized the importance of undertaking structural reforms to make the external account more resilient to evolving global landscape and to ensure sustainable economic growth.
Real Sector
4. Real GDP growth was provisionally recorded at 3.9 percent in Q2-FY26, bringing cumulative growth
in H1-FY26 to 3.8 percent, reflecting a broad-based improvement in economic activity as compared to the
same period last year. Large-scale manufacturing posted a robust performance, growing by 5.9 percent during July–February FY26. High-frequency industrial and services sector indicators, which had been showing strong momentum in economic activity till February, showed some signs of moderation in March. In agriculture,
growth prospects have moderated slightly, driven mainly by lower than anticipated wheat production as per
the first estimates reported by the Federal Committee on Agriculture. This, along with the expected spillover
of the ongoing Middle East conflict on industrial and services sector activity in Q4, is expected to result in
real GDP growth for FY26 turning out closer to the lower bound of the earlier projected range. The moderation in economic activity is likely to continue in FY27, though the outlook is subject to multiple risks,including the duration and intensity of the ongoing conflict.