{
  "id": 7056280,
  "title": "State Bank in tight spot as inflation rises",
  "url": "https://urgent.news/2026/09/13/state-bank-in-tight-spot-as-inflation-rises",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-13T03:43:20.000Z",
  "source": {
    "name": "Dawn",
    "slug": "dawn",
    "url": "https://www.dawn.com/news/2029577/state-bank-in-tight-spot-as-inflation-rises"
  },
  "original_language": "en",
  "account": "Pakistan and other regional states struggle to formulate economic and monetary policies due to the ongoing Gulf war, which has caused fuel prices to surge, according to researchers and analysts. The State Bank of Pakistan (SBP) is currently facing a tight spot as it anticipates a rise in inflation in 2026-27 and a global trend of higher interest rates. The current interest rate stands at 11.5%, but trade and industry experts believe it is excessively high compared to competitive markets. Bankers expect the policy rate to remain unchanged, while some analysts predict a 50 basis points hike at the Monetary Policy Committee (MPC) meeting on Monday.\n\nThe SBP had increased its policy rate by 100 basis points to 11.5% on April 27 in response to rising global energy prices and supply chain risks. With the Gulf war expanding to the Red Sea, fuel prices have now surpassed $100 due to constant attacks, which have made it impossible for oil tankers to traverse the route. Some analysts suggest that the State Bank is in a challenging position when it comes to tightening its monetary policy stance amid the surge in inflation. However, the SBP has reportedly favored maintaining the status quo.\n\nInflation rose to double digits at 11.1% in August, up from 9.2% in July. A senior banker emphasized that the State Bank must consider the long-term implications and might choose to counter inflationary pressure with a slight interest-rate increase. Faisal Mamsa, CEO of Tresmark, noted that Pakistan's interest rate outlook may no longer be solely about Pakistan's inflation but rather the concerns of others as well. He pointed out that global markets are experiencing turmoil, with Brent oil prices above $105, the European Central Bank (ECB) raising rates by 25 basis points, global bond yields surging, and US inflation remaining high at around 3.4%.\n\nA Tresmark poll conducted on Wednesday revealed that 20% of institutional traders anticipate a 50 basis points rate hike during Monday's MPC meeting. While the banker previously stated that the status quo was likely the best-case scenario for the September MPC, he remains confident that this outlook will prevail. Bloomberg Economics and BMI have now adopted a similar viewpoint, predicting no change on Monday but an upward pressure on rates moving forward.",
  "summary": "KARACHI: Pakistan and other regional states are unable to adopt a clear position on economic and monetary policies due to the prolonged Gulf war , which has driven up fuel prices, according to researchers and analysts. An increase in inflation in 2026-27 and a global trend of higher interest rates have also forced the State Bank of Pakistan to take cautious steps regarding the policy rate to be…",
  "key_points": [
    "Pakistan faces economic challenges due to Gulf war fuel price surge",
    "State Bank of Pakistan anticipates inflation rise in 2026-27",
    "Monetary Policy Committee may hike interest rates by 50 basis points"
  ],
  "editors_take": "The State Bank of Pakistan faces a challenging policy decision as it balances the need to counter rising inflation with the risk of high interest rates in a competitive market.",
  "illustration": null,
  "coverage": {
    "outlets": 2,
    "also_reported_by": [
      {
        "outlet": "Dawn Business",
        "title": "State Bank in tight spot over policy rate as inflation rises amid Gulf conflict",
        "url": "https://urgent.news/2026/09/13/state-bank-in-tight-spot-over-policy-rate-as-inflation-rises-amid",
        "published": "2026-09-13T03:44:02.000Z"
      }
    ]
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}