The SBP policy rate explained: what 11% means for your car loan, mortgage and savings
The policy rate anchors KIBOR, which sets the price of almost every loan in Pakistan. Here is how a change flows through to instalments and deposit returns.
The State Bank's Monetary Policy Committee sets the policy rate roughly every six to eight weeks. Banks price loans off KIBOR, the interbank rate, which tracks the policy rate closely.
Loans
A car loan is typically priced at 1-year KIBOR + 2–4%. At an 11% policy rate, that puts most car financing at 13–15%. On a Rs 3 million loan over five years, each 1% change in the rate moves the monthly instalment by about Rs 1,500. Model it with the Car Loan Calculator.
Home finance is similar but longer, a 1% change on a 20-year Rs 10 million mortgage is roughly Rs 6,500 a month.
Savings
Bank savings accounts must pay at least the policy rate minus a spread on PLS deposits. National Savings and Naya Pakistan Certificates re-price with a lag.
What to watch
Inflation prints (monthly CPI), the rupee, and the IMF programme reviews shape the committee's decisions. Searchable tracks the rate history on the SBP hub.
Sources
- SBP: Monetary Policy Decisions: State Bank of Pakistan
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