Easing geo tensions, oil slide likely tilt SBP toward pause

June 15, 2026 (MLN): The State Bank of Pakistan (SBP) is set to unveil its monetary policy today, but the mood in markets has done a sharp U-turn compared to just a few weeks ago.

Earlier, expectations were split right down the middle: some anticipated a pause, others braced for another hike, driven by fears of sustained geopolitical tensions and sticky oil-driven inflation.

With easing tensions after a breakthrough diplomatic understanding between major global players, the pressure valve in oil markets has started to release. What was once a heated macro backdrop has now cooled materially.

The SBP may no longer be staring at an inflation story dominated by external shock risk, but rather a softer, more contained price environment where urgency for further tightening has faded.

To note, Brent crude, which was sitting at a closing level of 111.26 on April 27 (with a high of 112.7), has now fallen sharply to around 83.47, after touching a high of 85.93 today.

WTI has mirrored the same collapse, down from a closing of 99.93 and a high of 101.85 on April 27, to nearly 80.57 today, after peaking at 82.34.

Back then, the argument for tightening was anchored in a fragile external environment, where oil spikes threatened both inflation and the current account. Today, that risk premium has visibly faded.

Inflation still matters, of course, but the composition is shifting. Imported pressure is easing, and the urgency for pre-emptive tightening looks far less compelling than it did in the previous cycle.

Against this backdrop, today’s meeting of the State Bank of Pakistan carries a very different undertone: less about reacting to shocks, and more about assessing stability that may already be returning on its own.

What was once a divided call in the market is now tilting toward a broader expectation of a policy pause, almost as if the macro winds have changed direction overnight.