Regulatory Alerts2026-04-27 | DMMD Circular No. 02SBP Policy Rate and Overnight Repo/Reverse-Repo Facilities
The State Bank of Pakistan increased its Policy Rate to 11.50% and adjusted the overnight interest rate corridor. The new framework sets the overnight reverse repo ceiling at 12.50% and the repo floor at 10.50%, establishing a 200-basis-point corridor. Effective April 28, 2026, commercial banks and primary dealers must align their money market overnight rates to remain close to the updated target rate.
Circulars/Notifications -
Domestic Market & Monetary Management Department
DMMD Circular No. 02 of 2026
April 27, 2026
The Presidents/Chief Executives, All Commercial Banks/ Primary Dealers
Dear Sirs/Madams,
SBP’s Policy Rate and Overnight Repo / Reverse-Repo Facilities
Please refer to DMMD Circular No. 09 dated December 15, 2025. Following changes are announced with reference to this circular:
SBP has decided to increase ‘Policy Rate’ (Target Rate) from 10.50% to 11.50%.
SBP Overnight Reverse Repo (Ceiling) rate will be at 12.50%, i.e. 100 bps above the SBP Policy Rate.
The SBP Overnight Repo (Floor) rate will be at 10.50%, i.e. 100 bps below the SBP Policy Rate.
Accordingly, the Floor and Ceiling levels for the Interest Rate Corridor are 10.50% and 12.50% p.a., respectively (i.e., width of 200bps).
SBP will continue to ensure that the money market overnight rate remains close to the SBP Policy Rate (Target Rate).
Above changes are effective from April 28th, 2026. Other instructions on the subject shall, however, remain unchanged.
Yours Sincerely,
Sd/
Aniq Aziz Director
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