IMF Presses for Market-Based Rupee as SBP Defends 11.5% Policy Rate

IMF and SBP: The Policy Tug-of-War

Talks between Pakistan and the IMF in October 2026 exposed a gap over two key policies.

The IMF's position

• A market-determined exchange rate, with less central bank intervention.
• Tighter monetary policy to keep inflation anchored.

Pakistan's position

• The State Bank of Pakistan told the Fund its 11.5% policy rate remains appropriate.
• Officials projected inflation of about 7.5% for the fiscal year and said they expect the rupee to stay stable.

Why the market cares

A higher policy rate would hurt leveraged companies and favour banks' margins. A sharper rupee move would hit importers and help exporters. Either outcome would reshuffle PSX sector leadership, so traders watch every IMF headline.

Based on reports from October 2026; no November review outcome had been published at the time of writing. Educational content, not investment advice.