Current policy rate in Pakistan
The latest decision we checked on the State Bank of Pakistan (SBP) homepage and in the Monetary Policy Statement is:
SBP policy rate raised by 50 bps to 12% with effect from 27.10.2026 (MPC)
SBP announced it on its homepage banner in these words: "MPC HAS DECIDED TO INCREASE THE POLICY RATE BY 50 BPS TO 12% W.E.F. OCTOBER 27, 2026." "W.e.f." means "with effect from". "Bps" means basis points, the unit central banks use for small rate changes.
The rate can change at any MPC meeting. Before you rely on it, check the current figure on the official SBP website (sbp.org.pk). The homepage shows it under "SBP Policy Rate & Interest Rate Corridor Facilities".
- The central bank raises its policy rate, or signals that it will.
- Deposits and bonds in that currency start to pay more.
- Investors move money into the currency to earn the higher yield.
- The currency tends to strengthen; a rate cut usually works the other way.
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What the SBP policy rate is
The policy rate is the main SBP interest rate. It is often called the "SBP interest rate". SBP uses it to steer short-term interest rates in the economy. Those rates then affect inflation, credit growth and, indirectly, the rupee.
- Higher policy rate: borrowing costs more and saving pays more. This usually slows spending and price growth.
- Lower policy rate: borrowing becomes cheaper and saving pays less. This usually supports spending and investment.
SBP's main concern is inflation. To see how prices are measured, read Inflation (CPI and SPI). The wider picture is on SBP rates and economy.
The interest rate corridor
SBP does not set every market rate directly. It runs an interest rate corridor, which is a band of standing facilities around the policy rate:
| Part of the corridor | What it is | Who uses it |
|---|---|---|
| Ceiling (reverse repo facility) | Rate at which SBP lends overnight to banks against collateral | Banks short of cash |
| Policy rate | Target for the overnight money market rate | Set by the MPC |
| Floor (repo facility) | Rate at which banks can place surplus cash with SBP overnight | Banks with excess cash |
No bank has a reason to borrow from another bank above the ceiling, because it can borrow from SBP. It also has no reason to lend below the floor, because it can place the money with SBP. This keeps the overnight interbank rate inside the band, close to the policy rate. SBP also uses open market operations (OMOs), which add or drain liquidity, to hold market rates near the target.
The current ceiling and floor are published together with the policy rate on the SBP homepage. Check them there, because they move when the policy rate moves.
Who decides: the Monetary Policy Committee
The Monetary Policy Committee (MPC) of SBP takes policy rate decisions. After each meeting SBP publishes:
- a short announcement with the decision and the effective date;
- a Monetary Policy Statement (MPS) that explains the reasons, such as inflation, the current account, reserves, fiscal policy and global conditions;
- in many cases, a press conference by the Governor.
MPC calendar
SBP publishes its schedule of MPC meetings in advance on its website. Market participants mark these dates, because banks reprice deposits and loans after a change. You can track the meetings alongside other releases on our Economic calendar (PKT). Always confirm the dates on the SBP site, because a meeting can be rescheduled.
How the policy rate feeds KIBOR
KIBOR (Karachi Interbank Offered Rate) is the benchmark at which banks quote to lend to each other for set periods. It is fixed for several tenors, from short periods up to longer ones.
The chain works roughly like this:
- The MPC sets the policy rate, and the corridor moves with it.
- The overnight interbank rate stays inside the corridor.
- KIBOR quotes for the various tenors adjust. Banks often price in expected rate changes before the MPC announces them.
- Bank loans priced as "KIBOR plus a spread" reset at their next repricing date.
This is why KIBOR can move before an MPC meeting and not only after it. Details and tenors are on our KIBOR page.
Effect on deposits and loans
Loans. Most corporate loans, car financing and house financing in Pakistan use a floating rate tied to KIBOR. When the policy rate rises, your instalment usually rises at the next reset. Fixed-rate products do not change, but new fixed offers are priced from current rates.
Bank deposits. Profit rates on savings accounts and term deposits tend to follow the policy rate, often with a delay. SBP may issue rules on minimum profit rates for savings deposits. Check the current SBP circulars and your bank's published rate sheet.
Islamic banking. Islamic banks do not charge interest. Their profit rates and financing benchmarks still usually move with market rates. See Islamic finance.
Government savings. Profit rates on National Savings schemes and Naya Pakistan Certificates are revised separately. They are not tied automatically to every MPC decision. For a wider comparison, see Saving, Investing, Loans.
Policy rate history
SBP publishes the history of policy rate changes, past Monetary Policy Statements and corridor rates on sbp.org.pk, under its monetary policy section. Use that official record rather than copied tables, which may be out of date. When you quote a figure, note the date you checked it and give the source as "State Bank of Pakistan".
Policy rate, the rupee and traders
Rate decisions are a key input in fundamental analysis. They affect capital flows, the rupee and local markets. The decision itself is only part of it: the MPS wording and how it compares with market expectations also matter. See What moves the rupee and IMF and Pakistan for related factors.
If you follow rate news for forex or CFD trading, know the local rules. Per the SBP, remitting foreign exchange to overseas forex/margin/CFD platforms is not allowed through any payment channel (FERA s.5(1)). Also per the SBP, the purchase of offshore forex/margin/CFD products by Pakistani residents violates section 4(1) of FERA 1947. Per the SECP, offshore platforms have no Pakistani licence or oversight and offer no legal protection or recourse. Read Law and regulators before you act.
Leveraged forex and CFD trading can lose money fast, and rate announcements can cause sharp price moves and wider spreads. See Risk management.
Frequent questions
What is the current SBP policy rate?
The latest decision we checked: SBP policy rate raised by 50 bps to 12% with effect from 27.10.2026 (MPC). Confirm the current figure on the SBP homepage, because it can change at any MPC meeting.
Is the SBP interest rate the same as the policy rate?
Yes. In everyday use, "SBP interest rate" means the policy rate set by the MPC.
What is the difference between the policy rate and KIBOR?
The policy rate is SBP's target for the overnight market rate. KIBOR is the rate banks quote to lend to each other for set periods. KIBOR follows the policy rate and expectations about its future path.
How often does the MPC meet?
SBP publishes the meeting schedule in advance on its website. Check it there and on our Economic calendar (PKT).
Will my loan instalment change straight after a rate decision?
Not usually. A KIBOR-linked loan changes at its next repricing date in your loan agreement.
Where can I find the policy rate history?
On the SBP website, in the monetary policy section, alongside past Monetary Policy Statements. Terms such as repo and basis point are explained in the Trading glossary.