State Bank of Pakistan

The State Bank of Pakistan (SBP) has capped digital transaction fees for petroleum sales at Re1 per litre for card payments and 20 paisas per litre for QR/online transactions to reduce financial strain on fuel stations. The move addresses complaints from petroleum dealers about high prior fees (Rs3-4 per litre) and aims to promote digital inclusion via Raast QR adoption, with the policy valid until January 31, 2027.

Pakistan has requested a $10 billion Exchange Stabilisation Support Facility from the US Treasury to address external financing pressures, including foreign exchange reserves and debt obligations. The US Treasury’s Exchange Stabilisation Fund has historically supported economies like Mexico and Argentina. An IMF economist noted the facility could provide liquidity but emphasized the need for structural reforms.

A webpage impersonating Dawn Media Group circulated a false report about business tycoon Arif Habib launching an AI platform called BTC+700 Lurot. The fake news story, hosted on a non-Dawn domain, included fabricated claims of government and corporate support and featured AI-generated images and embedded forms to collect user data.

An artificial exchange rate in Pakistan has discouraged exporters and hindered foreign investment, particularly in exportable manufacturing. The rupee's appreciation against the dollar increased production costs, widened the trade deficit to $39 billion in FY26, and reduced competitiveness compared to regional rivals like China. Experts argue that gradual currency depreciation is needed to boost exports and attract investment.

The State Bank of Pakistan maintained its policy rate at 11.5%, drawing praise from foreign investors for providing economic breathing space but criticism from local business groups who argue it stifles industrial recovery. Stakeholders highlighted conflicting views, with OICCI supporting the decision amid improved macroeconomic conditions and FPCCI labeling it contractionary, citing elevated costs and competitiveness challenges.

The State Bank of Pakistan’s Monetary Policy Committee (MPC) maintained the policy rate at 11.5% amid inflation pressures linked to the Middle East crisis and food price surges. The central bank projects inflation will decline to within its target range by mid-2026 if geopolitical tensions ease, while aiming for $20.2bn in foreign exchange reserves by December 2026.

The State Bank of Pakistan is expected to keep its policy interest rate unchanged amid uncertainty from the Gulf war, which has driven global oil prices above $100 per barrel. Analysts suggest the central bank prioritizes stability over growth, with the World Bank projecting economic growth below 4% in FY27 despite government targets.

S&P Global Ratings upgraded Pakistan's long-term sovereign credit rating to 'B' from 'B-', citing improved external position and macroeconomic stabilization. The upgrade is linked to IMF reforms, increased foreign reserves, and a stable political environment.

Pakistan recorded a $139 million current account deficit in FY26, reversing from a $1.838 billion surplus in FY25. Remittances increased to $41.585 billion, mitigating the deficit, while foreign direct investment fell 34% to $1.64 billion. The Gulf war disrupted oil prices and contributed to economic pressures.

The Gulf war has caused a significant outflow of foreign investment from Pakistan, with Bahrain withdrawing $30 million from domestic bonds in the first 10 days of FY27. The UAE also withdrew $3.5 billion, though Saudi Arabia offset this to prevent a current account imbalance, as Gulf states collectively halted investments amid rising oil prices and economic instability.

Pakistan received a record $41.6 billion in workers’ remittances in FY26, an 8.6% increase compared to FY25, according to the State Bank of Pakistan. Key remittance sources in June included Saudi Arabia ($829.6 million) and the UAE ($792.3 million), while the government surpassed its revised target despite Gulf region uncertainties.

Prime Minister Shehbaz Sharif directed the formulation of a comprehensive strategy to enhance small and medium-sized enterprises' (SMEs) access to financing, emphasizing collaboration with the State Bank of Pakistan and commercial banks. He also highlighted support for farmers processing agricultural produce, dedicated financial products for SMEs, and assistance for young and women entrepreneurs.

The State Bank of Pakistan (SBP) has abolished the Sohni Dharti Remittance Programme (SDRP) and Telegraphic Transfer Charges Incentive Scheme (TTCIS), effective July 1, 2026, following IMF scrutiny. The incentives, which cost up to Rs120bn annually, were discontinued to address concerns over non-performance-linked financial allocations. Banks will continue offering free remittance transfers to users despite the scheme’s termination.

The National Assembly Standing Committee on Finance approved 30 major amendments to the Finance Bill 2026, including tax collection reforms for imported mobile phones, mandatory digital production monitoring, and duty waivers for electric vehicles. The revised bill introduces tax stamps, barcodes for goods clearance, and algorithm-based dispute resolution, with final approval pending in the National Assembly.

The Supreme Court of Pakistan signed a tripartite agreement with the State Bank of Pakistan and 1LINK (Guarantee) Ltd to integrate digital payment solutions into judicial processes, replacing manual legal fee systems with electronic transactions to enhance efficiency and transparency.

The business community in Pakistan expressed disappointment over the State Bank of Pakistan's (SBP) decision to maintain the policy rate at 11.5%, urging a rate cut to support industrial recovery, exports, and investment. Organizations like the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and others argued that the unchanged rate hampers economic growth and competitiveness.

The State Bank of Pakistan maintained the policy rate at 11.5 per cent during its final policy review of FY26. The previous rate increase occurred on April 27, driven by geopolitical tensions in the Gulf, but analysts now note stabilized oil prices and improved supply chain conditions as reasons for keeping rates unchanged.

Pakistan has sustained a Ponzi finance system for 25 years by borrowing to pay interest on debt, with debt-to-GDP rising from 58% to 82% between 2012 and 2023. The scheme avoided collapse through captive lenders, inflation eroding debt value, and internal financial system transfers.

Pakistan's 2026-27 budget faces risks including a $40-per-barrel oil price increase adding 0.8pc to fiscal deficit, natural disasters threatening 1.5pc fiscal impact, tax exemptions causing 1.3pc budget losses, and state-owned entities draining 0.4pc. The finance ministry identified seven key fiscal vulnerabilities linked to global oil prices, GDP growth, revenue shortfalls, and climate impacts.

The State Bank of Pakistan's Monetary Policy Committee is unlikely to raise the policy rate in its June 15 meeting due to eased Gulf tensions and stable oil prices. The only rate hike in FY26 occurred on April 27, but analysts note improved supply chain conditions and prospects for a US-Iran deal have reduced inflationary pressures.

Pakistan recorded its highest-ever monthly remittance inflow of $4.3 billion in May, a 20.2% increase from April and 15.4% higher than May 2023. Saudi Arabia contributed the most at $1.025 billion, followed by the UAE, UK, and US. Experts note weaker growth compared to FY25 due to concerns over exchange rates and diverted inflows.

Islamic banking in Pakistan originated in 1979 with terminology changes like replacing 'interest' with 'mark-up', but critics argue it remains non-Islamic. Since 2002, it has grown with Sharia-compliance oversight and financial instruments like sukuks, Ijara, and Takaful. However, profit structures in Islamic banking still mirror conventional banks by tying to policy rates, raising questions about alignment with Quranic principles.

Pakistan's foreign exchange reserves are nearing $18 billion for FY26, but a widening trade deficit of $34.76 billion threatens reserves and remittances. Experts warn of a potential current account deficit, depreciation pressure on the rupee, and challenges from upcoming foreign debt payments.

Pakistan has received a $1 billion financial boost from Saudi Arabia, while the United Arab Emirates is seeking repayment of previous loans. The State Bank of Pakistan in Karachi is involved in these financial transactions.

Pakistan is engaging in discussions with Saudi Arabia and China following the UAE's recent loan initiative. The State Bank of Pakistan is involved in these financial negotiations.