{
  "id": 7058262,
  "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",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-13T03:44:02.000Z",
  "source": {
    "name": "Dawn Business",
    "slug": "dawn-business",
    "url": "https://www.dawn.com/news/2029588/state-bank-in-tight-spot-over-policy-rate-as-inflation-rises-amid-gulf-conflict"
  },
  "original_language": "en",
  "account": "Karachi, Pakistan is grappling with an economic conundrum as the prolonged Gulf War and its impact on fuel prices send inflation soaring, according to experts. The State Bank of Pakistan faces a challenging dilemma in deciding the appropriate monetary policy rate for the upcoming Monetary Policy Committee meeting on Monday. Currently, the interest rate stands at 11.5 percent, but industry insiders believe it to be excessive compared to competitive markets.\n\nBankers and analysts disagree on whether the central bank will maintain the policy rate or increase it by 50 basis points. The Federal Bank raised its policy rate by 100 basis points to 11.5 percent in April 27, in response to increasing global energy prices and supply chain risks. As the conflict in the Gulf escalated to the Red Sea, fuel prices skyrocketed above $100 due to continuous attacks on oil tankers, disrupting global supply chains.\n\nInflation has returned to double-digit levels, reaching 11.1 percent in August, up from 9.2 percent in July. A senior banker, Faisal Mamsa, CEO of Tresmark, suggests that the central bank must consider the long-term consequences of its actions, as the inflation problem may not be limited to Pakistan. Global markets are experiencing turbulence, with Brent oil prices surpassing $105, the European Central Bank (ECB) raising interest rates by 25 basis points, global bond yields surging, and inflation in the United States lingering around 3.4 percent.\n\nA Tresmark poll conducted on Wednesday revealed that 20 percent of institutional traders anticipate a 50 basis point rate hike in the upcoming Monetary Policy Committee meeting. While two weeks ago, the bank indicated that a status quo may be the best-case scenario for the September meeting, they remain firm in their belief. Bloomberg Economics and BMI have now also adopted a similar stance, predicting no change in rates for the upcoming meeting but foreseeing upward pressure on interest rates in the future.",
  "summary": "https://www.dawn.com/news/2029577/state-bank-in-tight-spot-as-inflation-rises",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 2,
    "also_reported_by": [
      {
        "outlet": "Dawn",
        "title": "State Bank in tight spot as inflation rises",
        "url": "https://urgent.news/2026/09/13/state-bank-in-tight-spot-as-inflation-rises",
        "published": "2026-09-13T03:43:20.000Z"
      }
    ]
  },
  "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."
}