Get the latest news and updates from Dawn
KARACHI: The grounds for an increase in the policy rate have largely disappeared ahead of the State Bank of Pakistan’s (SBP) upcoming monetary policy announcement, as global oil prices have either remained stable or eased despite heightened tensions in the Gulf, market participants said.
The Monetary Policy Committee (MPC) is scheduled to meet on June 15 for what will be the final policy review of FY26. The only increase in the policy rate during the current fiscal year came in the previous review on April 27, when the SBP raised the benchmark rate by 100 basis points to 11.5 per cent.
The increase was attributed to geopolitical tensions following the conflict in April, which pushed oil prices higher and disrupted global supply chains.
However, analysts said developments over the past month have reduced concerns over a prolonged conflict. Prospects for a deal between the US and Iran have improved, while a ceasefire remains in place despite sporadic attacks by both sides. Iran also targeted US bases in several Gulf countries, although reports of ongoing diplomatic efforts have helped calm markets.
