💱 THE RUPEE RATE

For every £1,000 you send home this week, your family receives approximately Rs 369,000. Rates checked 5 April 2026

📈 KSE-100 THIS WEEK - 150,398 — down 1,309 points this week (−0.86%) Still up 26% year-on-year.

Pakistan's central bank may be about to raise interest rates sharply. Here is what you need to understand.

What happened

The State Bank of Pakistan is expected to announce a major interest rate decision on 27 April. After cutting rates aggressively from 22% down to 10.5% over the past two years, sources are now suggesting the SBP could reverse course — raising rates by anywhere from 50 to 300 basis points at its next meeting. The current policy rate stands at 10.5%.

Why it matters

This is one of the most consequential economic moments Pakistan has faced since its near-default in 2023. Here is the context in plain English.

Pakistan spent the last two years celebrating falling inflation — prices that had surged to nearly 40% in 2023 had come back down to around 4%. The SBP cut rates six times in response, pumping cheaper money into the economy and giving a significant boost to the stock market. That easing cycle is now under serious threat.

The trigger is the ongoing Middle East conflict. The disruption to oil supply routes through the Gulf has sent global energy prices sharply higher. Pakistan imports virtually all of its oil. Higher global oil prices feed directly into Pakistan's petrol prices — which were already hiked by over 21% in March — and from there into the price of everything: transport, food, manufacturing, electricity. Pakistan's inflation, which had fallen to a four-year low, is now rising again. February's figure came in at 7% — a 16-month high — and economists are forecasting it could hit 8-9% by May or June.

The SBP has a problem. If it does not raise rates, inflation could spiral and the rupee could weaken. If it does raise rates, borrowing becomes more expensive, businesses slow down, and the stock market — which has been one of Asia's best performers — faces pressure.

There is one potential lifeline: a $1.2 billion IMF disbursement expected before 20 April. If that arrives on time, it bolsters Pakistan's foreign exchange reserves and gives the SBP more room to manoeuvre. If it is delayed, the case for a rate hike becomes much stronger.

What it means for you

If you hold a Roshan Digital Account fixed deposit at current rates, you are locked in — your return is protected regardless of what the SBP does. If you have been sitting on the fence about opening one, this is worth paying attention to: a rate hike would likely increase the yields on offer, but it would also signal that inflation is rising and the real value of those returns may be eroded. Watch the 27 April MPC announcement closely — we will cover it in full in the next issue.

For the rupee, a rate hike generally supports the currency by attracting yield-seeking investors. If the SBP raises aggressively, GBP/PKR could strengthen modestly in Pakistan's favour — meaning you would get slightly fewer rupees per pound. If the SBP holds or raises only slightly, the rupee may drift weaker. No dramatic moves expected either way in the short term.

Pakistan has a £1.3 billion debt payment due this week. Here is why it matters.

What happened

Pakistan must repay a $1.3 billion Eurobond that matures on 8 or 9 April 2026. This is a significant debt obligation coming at an already stressful time for the economy.

Why it matters

A Eurobond is a loan Pakistan took from international investors, denominated in US dollars. When it matures, Pakistan must repay the full amount in hard currency — dollars it needs to source from its foreign exchange reserves or from new borrowing. The problem is that Pakistan has not been able to issue any new international bonds this fiscal year — no Eurobond, no Sukuk, no Panda bond — leaving it reliant on its reserves and IMF support to meet this payment.

Pakistan's foreign exchange reserves are currently around $14 billion. Paying $1.3 billion in one go is manageable but leaves less cushion at a time when import costs are rising due to higher oil prices

What it means for you

This payment will not directly affect the rupee exchange rate dramatically on its own. But combined with rising inflation and oil prices, it adds pressure to Pakistan's external position. The IMF disbursement of $1.2 billion — if it arrives before the payment — would effectively offset it. The next two weeks are worth watching for anyone with significant PKR holdings or remittance decisions to make.

21% — the increase in petrol prices Pakistan applied in March 2026 as the Gulf conflict drove global oil prices higher. For context, petrol is not just what goes in your car. It is the input cost for every truck that moves food from farm to market, every generator powering a business during a power cut, and every motorcycle taxi carrying workers across Karachi. When petrol goes up 21%, it ripples through the entire cost of living within weeks.