Interest Rate Decision Today: What SBP's 11.5% Policy Rate (or a Hike) Means for Your Online Business in Pakistan

What is happening with the interest rate in Pakistan today?

The State Bank of Pakistan's Monetary Policy Committee (MPC) meets today, Monday 26 October 2026, to set the interest rate, and the decision affects every online business in Pakistan, including sellers who have never taken a loan. The policy rate has been 11.5 percent since 28 April 2026. The decision is normally announced later in the day, so check SBP's announcement this evening. This post is written so you can use it whichever way the decision goes.

What the market expects: in Dawn's preview published on 25 October, most financial experts said a hike of 50 basis points (0.5 percentage points) is likely, taking the rate to 12 percent. One senior banker said the market needs 100 basis points to tame inflation, which would mean 12.5 percent. Business groups in Karachi oppose any hike and want rates brought down to single digits. The reasons given for a hike are costlier oil imports tied to the Middle East conflict and the risk of inflation rising further.

The prices your customers see are already moving. CPI inflation averaged 10.2 percent in July to September 2026 (the first quarter of FY27), according to the same Dawn report, against 4.3 percent a year earlier. In the week ended 22 October, the Sensitive Price Indicator, which tracks 51 essential items, was 11.85 percent higher than a year ago. That week alone LPG rose 22.44 percent, chicken 12.20 percent and onions 4.19 percent, while tomatoes fell 21.99 percent and petrol 3.63 percent.

How did we get here? The 2026 interest rate timeline

The table puts this year's decisions in one place. Every figure is from SBP statements as reported by Dawn and ProPakistani; the sources are listed at the end.

In September the MPC said 11.5 percent was appropriate to guide inflation towards its 5 to 7 percent target over the medium term, but that uncertainty had increased. Inflation has stayed above 10 percent since August, and the MPC itself expected it to stay above the target range for most of FY27. That is why a hike is on the table today.

Three ways the interest rate reaches an online seller

Most Pakistani Shopify and COD sellers do not borrow from a bank, so it is easy to think the policy rate is not your business. It reaches you through three doors.

1. Borrowing. Bank running finance, business loans and many other lending products are priced off a market benchmark that moves with the policy rate. If you financed stock for the 11.11 sale or for winter, ask your lender what your rate is linked to and when it resets. If you take a cash advance against COD orders from any provider, read how its fee is set.
2. Cash stuck between order and payout. With COD, your money sits with the rider and the courier for days before it reaches your account, and returned parcels lock up stock until they are back on your shelf. That cash has a cost even if you never borrow: it is money you could not use to buy stock or run ads. The higher rates go, the more that waiting costs.
3. Your customer. Higher rates make installment and credit purchases more expensive and make savings more attractive, and they usually come at a time when prices are already rising, as the SPI numbers above show. For a COD seller that pressure shows up at the door, when the customer decides whether to pay the rider.

Example: what a hike adds to a stock loan

Example (illustrative numbers, not from any real store). You borrow Rs 1,000,000 for 90 days to buy stock for 11.11 and winter. Bank rates are usually above the policy rate; for this example we assume your loan costs 4 points above the policy rate. Your real rate will differ, so put your own number in.

If that Rs 1,000,000 bought 1,000 units at Rs 1,000 each, interest works out to about Rs 38, Rs 39 or Rs 41 per unit. A hike adds one to three rupees per unit. So the honest answer to whether you should raise prices because of today's decision is no. Price for your product cost, delivery, returns and the inflation your suppliers pass on, not for half a percentage point on the policy rate.

Example: the bigger cost is cash stuck in COD

Example (illustrative numbers). You get 40 COD orders a day at an average of Rs 3,000. 75 percent are delivered and 25 percent come back. Delivery takes 4 days and your courier pays out 7 days after delivery. A returned parcel's stock, Rs 1,200 at cost, takes 12 days to come back to your shelf.

• Delivered cash per day: 30 parcels x Rs 3,000 = Rs 90,000.
• Cash waiting with rider and courier: Rs 90,000 x 11 days (4 delivery + 7 payout) = Rs 990,000.
• Stock locked in returns: 10 parcels x Rs 1,200 x 12 days = Rs 144,000.
• Total locked: Rs 1,134,000, all the time, just to keep the store running.

If that money costs you 16 percent a year, either because you borrow it or because you could have used it to buy stock or run profitable ads, it costs about Rs 15,120 a month. Now compare the two levers.

In this example a faster payout is worth about ten times more than the rate decision, and fewer returns are worth far more than the locked-stock line shows, because each extra delivered parcel brings in its full margin instead of a return fee. The decision in Karachi today is something you cannot control. Payout speed and returns are.

What to do this week

1. Check the decision this evening. If the rate goes up, any loan linked to a market benchmark will usually reprice at its next reset date. Ask your bank or lender for the date and the new rate in writing.
2. Do not over-borrow for 11.11. The sale is on 11 November, 16 days away. Finance only the stock you have sold through in past sales, not a hopeful number. Unsold stock carries interest every day it sits.
3. Ask your courier about faster payouts. Ask whether your courier offers a shorter payout cycle and what it costs. Moving from weekly to more frequent settlement frees cash without borrowing. Compare any fee with the example above before switching.
4. Reconcile every COD payout. Cash that is delayed or short in a courier statement is cash you are financing for free. Match each payout to delivered orders this week.
5. Watch returns by product and price band. With SPI inflation at 11.85 percent and LPG and chicken jumping in one week, household budgets are tight. If higher-priced items come back more, offer a smaller pack or a basic version. RabbitROI shows return rates by courier, city and product, and net profit per ad campaign after returns, if you want to see where the leak is.
6. Keep pricing decisions separate. Raise prices only when your own costs rise. Check what your suppliers are charging this month, not the headline rate.
7. If you claim loan interest as a business expense, check with your accountant how a rate change affects your tax.

What a hold, a 0.5 hike or a 1 point hike would mean

• Hold at 11.5 percent: borrowing costs stay where they are. Inflation is still above 10 percent, so the pressure on your customers stays. Keep your focus on returns and cash cycle.
• Hike to 12 percent: in our example, about Rs 1,233 more per Rs 1,000,000 borrowed for 90 days. Small for most sellers. Expect lenders to be a little stricter, and plan stock more carefully.
• Hike to 12.5 percent: about Rs 2,466 more per Rs 1,000,000 for 90 days in our example. A signal that SBP sees inflation as the bigger risk. Customers may stay careful into the winter and wedding season, so protect delivery rate before chasing more orders.

Whatever the outcome, the numbers that decide your month are the same: how many orders turn into cash, and how quickly that cash reaches you.

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