Pakistan’s policy interest rate may rise by 1.5 to 3 percentage points amid expectations of a sharp increase in inflation, economic experts said ahead of the central bank’s upcoming monetary policy decision.

The State Bank of Pakistan is scheduled to announce its policy on April 27, with projections suggesting the benchmark rate could climb to between 12% and 14%.

Analysts say rising petroleum prices are likely to fuel inflationary pressures, prompting the central bank to tighten monetary policy to stabilise prices and the exchange rate.

However, experts noted that the anticipated release of the third loan tranche from the International Monetary Fund could ease external financing pressures and support foreign exchange reserves.

Despite this, economists believe a rate hike remains a strong possibility as authorities seek to contain inflation and maintain macroeconomic stability.