💱 THE RUPEE RATE

For every £1,000 you send home this week, your family receives approximately Rs 369,510. Rates checked 8th November 2026

📈 KSE-100 THIS WEEK

The strongest weekly rally in nearly six months. Average volumes rose 43% week-on-week to 856 million shares and traded value rose 24% to $103 million. Friday gave some back on profit-taking before the long weekend. The index touched 176,604 intraday on Thursday.

Oil had its worst week since 2020, and it started with an American election.

What happened

Brent crude fell from around $118 a barrel at the end of October to the high $90s by Friday - a one-week drop of more than 17% on Reuters’ measure, the biggest weekly percentage fall since the start of the COVID-19 pandemic in 2020. The sequence: Brent fell 7.5% on Monday 2 November as Iranian and Qatari officials held talks and a draft proposal circulated. It settled at $103.60 on Tuesday, the lowest since 7 October. Then on Wednesday 4 November it crashed 8.6% to around $94.66, a two-month low, after Democrats won both houses of Congress in Tuesday’s US midterm elections. Trump told Fox News the defeat came down to “the gasoline price.” Brent recovered about 4% on Thursday to near $98.

Why it matters

This is the clearest demonstration yet that Pakistan’s macroeconomic position is, right now, largely a function of one variable it does not control.

The logic the market ran was straightforward. A Democratic sweep of Congress means the administration faces pressure to end the war with Iran, and analysts noted the result could constrain war funding. Iran signalling openness to talks, with Qatar mediating, pointed the same way. If the war ends, the risk premium on Gulf crude comes out, and with it the single biggest driver of Pakistani inflation this year.

Every Pakistani economic story of the last six months traces back to oil. The inflation spike from 5.8% last September to 11.15% in August. The SBP’s decision to abandon the easing cycle and hike. The current account pressure. The 20% equity drawdown through September and October. The LPG and diesel squeeze. All of it is the energy import bill.

So when oil falls 17% in a week, the whole chain reverses at once - which is what the equity market was pricing. Arif Habib’s weekly report attributed the rally directly to the midterm result and the oil collapse that followed on 4 November. JS Global’s Mohsin Shafi Qureshi noted the index rose as oil fell sharply on Iran’s openness to talks, easing concerns over both inflation and the external account.

The caution is in the word “if”. Raymond James analyst Pavel Molchanov noted that scepticism is warranted after many “false dawns” over the past several months, and Friday’s PSX decline came partly on renewed concerns about a possible US-Iran military confrontation. The war is not over. The market has priced a meaningful probability that it soon will be.

What it means for you

If you have been holding off on a larger remittance or a rupee investment because of the macro uncertainty, this week improved the picture - but on an assumption, not a fact. A peace deal would be genuinely transformative for Pakistan’s external position. A collapse in talks puts oil straight back above $110 and everything with it.

The practical implication is about position sizing rather than direction. If you were going to invest in the PSX, the case is better than it was a fortnight ago. It is not so much better that it justifies doubling the amount. The thing that caused this rally is a probability, and probabilities move.

Inflation fell to 9.6% - eight days after the State Bank raised rates to stop it rising.

What happened

The Pakistan Bureau of Statistics reported on Monday 2 November that headline CPI inflation was 9.6% year-on-year in October, down from 10.3% in September. Urban inflation fell to 9.5% from 10.1% and rural to 9.8% from 10.5%. Month-on-month prices rose 1.1%, against 1.3% in September. The reading came in at the bottom of the Finance Ministry’s 9.5–10.5% projection, and slightly above Topline’s 9.0–9.5% and Insight’s 9.3% estimates. For the first four months of FY27, inflation has averaged 10.05%, against 4.79% in the same period last year.

Why it matters

The timing is awkward and worth being honest about. The MPC raised the policy rate to 12% on 26 October, citing the need to contain second-round effects of the supply shock. Eight days later, inflation printed lower than expected. Two days after that, the supply shock itself fell apart as oil collapsed.

That does not make the hike wrong. Central banks set policy on forward-looking expectations, not last month’s data, and on 26 October a reasonable forecaster was looking at Brent near $115, diesel crossing Rs400 and a Gulf conflict escalating. The MPC said explicitly it wanted to keep the real policy rate adequately positive on a forward-looking basis. On the numbers available then, that was defensible.

But it does change what happens next. The real policy rate is now 12% against 9.6% inflation - a positive real rate of 2.4 percentage points, the widest it has been all year. If oil stays in the $90s, November and December inflation fall further on both lower fuel costs and favourable base effects. By the 14 December meeting the MPC could be looking at inflation in the eights against a 12% policy rate, which is a materially tighter stance than it intended to set.

The money market is already hinting at this. Six-month KIBOR eased from 12.42% on 4 November to 12.32% by Friday. Small, but the direction matters: before the hike, the curve was pricing further tightening. It is no longer doing that.

What it means for you

If you locked rupee deposits at 12% after the October hike, that decision looks better each week inflation falls. You are earning a wider real return than the SBP intended to offer.

If you have money still to place, there is now a genuine trade-off. Rates are unlikely to be higher than this in the near term, and if disinflation continues, the December meeting is the first realistic point at which the easing conversation restarts. Locking a longer tenor at today’s rate is the move that benefits from falling inflation. A short tenor assumes rates go higher, and the evidence for that is weakening by the week.

Nobody knows. But the balance of risk has shifted since Issue #26, and it has shifted toward “this is close to the peak.”

Rs369.06

The price of a litre of petrol from 4 November, after a cut of Rs5.45, with diesel down Rs3.68 to Rs391.52. Petrol has now fallen roughly Rs30 from its 9 October peak of Rs398.96 — a drop of about 7.5% in under a month.

This is where the oil story becomes a household story. Under the daily pricing mechanism introduced in July, international price falls reach the pump within days rather than waiting a fortnight. That mechanism was heavily criticised on the way up. On the way down it is doing exactly what it was designed to do.

Diesel matters more than petrol for prices your family actually pays, because it moves freight, buses, tractors and irrigation pumps. Diesel crossing Rs400 in late October was the squeeze flagged in Issue #26. It is now back below that line, and if oil holds in the $90s it should keep falling. The weekly SPI fell 0.35% in the week to 29 October, the first fall after a 0.65% rise the week before.

⚡ THE QUICK THREE

1. The rupee has now appreciated for 276 consecutive sessions. It closed Friday at 276.71 to the dollar, up 0.54% this fiscal year and 1.25% this calendar year. What is striking is the consistency: the rupee has held its range through an oil spike to $118, a 20% equity drawdown, a 50bps rate hike and now an oil collapse. The SBP’s forward liabilities falling below $1 billion, flagged in Issue #25, is part of why - there is less hidden pressure on the currency than the headline reserve number alone would suggest.

2. A US consortium has proposed a $4.4 billion LNG project in Pakistan. The detail is thin so far, but the direction fits a pattern: this follows the proposed $10 billion US exchange stabilisation facility, the tax-free oil storage facilities offered to Saudi Arabia, and the Islamic Development Bank’s $5.6 billion cooperation framework. Pakistan is being courted on energy infrastructure in a way it has not been for a decade, and its improved credit standing is a large part of why.

3. The next catalysts are all in December. MPC minutes from the October hike are published on 20 November, which will show how close the one dissenting vote came to persuading others. The next rate decision is 14 December. October remittance data is due from the SBP imminently - September came in at $3.59 billion, with the July–September quarter tracking toward roughly $43.5 billion for FY27 against $41.6 billion in FY26.

🏠 EXPAT CORNER - This week’s practical tip

What a 17% oil move actually changes for you - and what it doesn’t

It is worth separating what genuinely changed this week from what only feels like it changed.

What changed: Fuel prices in Pakistan, immediately and measurably. Petrol down about Rs30 from its peak, diesel back below Rs400. The inflation trajectory, which now points down rather than sideways. The rate outlook, which has gone from “possibly higher” to “probably at or near the peak.” And the equity market, up 4.5% in a week.

What did not change: The rupee, which barely moved. Your remittance maths, which is essentially identical to a fortnight ago. Pakistan’s external debt servicing requirement of roughly $21.5 billion in FY27. And the fundamental fact that the war is not over - only that the market now thinks it might be.

The practical takeaways:

If you send money monthly, nothing here argues for changing your schedule. The pound at 370.63 is slightly worse than 372.83 on Thursday and roughly where it has been all autumn.

If you hold rupee deposits, hold them. If you have cash to place, December is the decision point, and the case for a longer tenor at 12% is stronger than it was.

If your family has been struggling with fuel and transport costs, the relief is real and arriving now rather than in a few months. If you increased what you send during the October squeeze, you may be able to step that back.

If you hold PSX positions, you have had a good week. Resist concluding from one good week that the risk has gone. The index is still below where it was in late June, and the thing that would take it meaningfully higher - an actual peace deal - has not happened yet.

General information, not personal financial advice. Confirm rates and terms with your provider before acting.

📅 WHAT’S NEXT

Hit reply: do you think the war actually ends, or is this another false dawn?