Rates stay at 11.5%: the July policy statement
A two-page read of what the State Bank decided, the numbers it cited and the risks it named. No call on the next meeting.
Executive summary
Executive Summary
01The Monetary Policy Committee unanimously kept the policy rate at 11.5% on 27 July 2026. It said the current stance remained appropriate for guiding inflation toward the 5% to 7% medium-term target.
02Headline inflation eased to 11.1% in June from 11.7% in May. Core inflation also eased, to 8.4%, but both measures remained elevated.
03The FY26 current account recorded a small $139m deficit. SBP reserves were around $17.3bn on 17 July after recent debt repayments.
04SBP projected FY27 real GDP growth of 3.5% to 4.5%. That is the central bank's projection, not a Tijarat forecast.
Unchanged, unanimous decision
11.7% in May
As at 17 July 2026
Official projection
Read this first
The basis of comparison
- Policy rate
- The reference rate set by the SBP Monetary Policy Committee. It influences other interest rates; it is not a promised return on any product.
- Headline inflation
- The year-on-year change in the overall consumer price index.
- Core inflation
- An inflation measure that strips out selected volatile items to show broader price pressure.
Finding
The rate stayed put because the picture improved, not because the risks disappeared
The committee saw softer June inflation, moderate external pressure and a pickup in some activity indicators. It also pointed to renewed Middle East risk and higher commodity prices.
The statement says earlier de-escalation lowered global oil prices and eased supply-chain disruption. That helped recent indicators, but the committee still described inflation as elevated.
The decision was unanimous. The statement does not promise the direction or timing of the next move.
Finding
The numbers the committee used
Inflation eased, private credit growth picked up, and the external account stayed manageable. These readings cover different dates, so they should not be treated as one simultaneous snapshot.
| Measure | Reading | Comparison or date |
|---|---|---|
| Policy rate | 11.5% | Unchanged on 27 July |
| Headline inflation | 11.1% y/y | June; 11.7% in May |
| Core inflation | 8.4% | June 2026 |
| FY26 current account | -$139m | Full fiscal year |
| SBP FX reserves | About $17.3bn | 17 July 2026 |
| Broad money growth | 13.2% y/y | 10 July; 15.2% at prior meeting |
| Private-sector credit growth | 14.9% y/y | 10 July 2026 |
Finding
The forecasts belong to SBP
The central bank published ranges and targets for growth, the current account, reserves and inflation. They are conditional on the risks described in the same statement.
SBP expects FY27 real GDP growth of 3.5% to 4.5% and a current-account deficit of 0% to 1% of GDP. It targets FX reserves of $20.20bn by the end of December 2026.
For inflation, SBP expects the rate to remain above target over the next few months, then ease toward the upper end of the 5% to 7% target range by June 2027.
| Measure | Official view | Horizon |
|---|---|---|
| Real GDP growth | 3.5%-4.5% | FY27 |
| Current-account deficit | 0%-1% of GDP | FY27 |
| FX reserves | $20.20bn target | End-Dec 2026 |
| Inflation | Near upper end of 5%-7% range | June 2027 |
Finding
The risk list is short and specific
SBP named global energy prices, administered energy-price adjustments, weather, food pressure and fiscal slippage as risks to the inflation path.
The growth outlook also carries commodity-price and weather risk, including possible El Nino effects. On the fiscal side, the committee called for a broader tax base, spending discipline and lower public-sector enterprise losses.
The MPC minutes are scheduled for the week ending 21 August 2026. They may add detail to the committee's discussion, but they will not change the decision already announced.
Next checks
Questions the next source should answer
- Do the August MPC minutes show concern concentrated in inflation, growth or external risks?
- Does June's inflation decline continue once later CPI releases arrive?
- Do reserves move toward the end-December target after scheduled debt payments and official inflows?
- Does private-sector credit growth remain broad across working capital, investment and consumer finance?
Limits
Caveats and assumptions
- This note summarizes the SBP statement. It does not predict the next policy decision or recommend any security.
- Forecasts, ranges and targets are attributed to SBP. They can change as new data and risks arrive.
- The figures in the statement use different cut-off dates. Read each date before comparing two measures.
- Interest rates affect companies and securities differently. This note does not translate the policy decision into a stock call.
Official record
Sources
- 01State Bank of PakistanMonetary Policy Statement, 27 July 2026 ↗
27 July 2026. Primary statement. Decision, current readings, official forecasts and named risks.
- 02State Bank of PakistanAdvance calendar of MPC meetings and communications for FY27 ↗
Accessed 5 August 2026. Official schedule for the statement, analyst briefing, minutes and monetary policy report.
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