💱 THE RUPEE RATE

For every £1,000 you send home this week, your family receives approximately Rs 370,000. Rates checked 25 July 2026

📈 KSE-100 THIS WEEK

Following the signing of the US-Iran Memorandum of Understanding on June 18, 2026, the easing of geopolitical tensions and softer international oil prices led market participants to increasingly price in cumulative rate cuts of 100-150 basis points over the next two to three MPC meetings. The KSE-100 has been trading in a holding pattern this week as investors wait for Monday's rate decision before making significant moves. The index remains up over 30% year-on-year. A hold on Monday is largely priced in - any surprise cut would trigger a sharp rally.

Pakistan just switched to daily petrol pricing. This is one of the biggest energy policy changes in years. Here is exactly what it means.

What happened

Effective July 17, 2026, the Oil and Gas Regulatory Authority has started revising the ex-depot prices of petroleum products after every 24 hours. The government implemented this measure to shield the local economy from extreme market volatility. OGRA now publishes daily pricing updates directly to its portal without requiring prior cabinet or Ministry approval, ensuring domestic prices track global market realities immediately. As of 23 July, petrol was selling at Rs 327.12 per litre under this new daily mechanism. These daily adjustments remain unchanged during weekends and public holidays.

Why it matters

For the entire history of Pakistan's fuel pricing system, prices were set fortnightly - the government would announce a new rate every two weeks based on OGRA's recommendation. This created a well-known distortion: when international oil prices were rising, everyone knew a price hike was coming in two weeks and panic-buying would occur. Petrol stations would run dry. When prices were falling, the government would sometimes delay passing on the reduction to build up fiscal cushion. The fortnightly system was opaque, politically manipulated, and created artificial shortages.

Daily pricing removes most of those distortions in one move. Under this framework, OGRA calculates daily pump rates using a 7-day rolling average of international oil prices, freight costs, and currency fluctuations, eliminating supply lag, preventing artificial shortages and panic buying ahead of anticipated price hikes. It is a structural reform that brings Pakistan closer to how fuel is priced in more sophisticated energy markets.

The trade-off is volatility. Petrol prices now move every single day. Overall, petrol has increased by more than Rs21 per litre since 27 June 2026 under the daily pricing model, despite two small dips along the way. On 22 July alone, petrol reached Rs 320.73 per litre - up Rs 4.93 in a single day. For ordinary consumers and businesses trying to plan their costs, daily price changes are harder to absorb than fortnightly ones. Transporters and logistics companies in particular are finding it difficult to price their services when their primary input cost changes every 24 hours.

What it means for you

For your family in Pakistan, the immediate practical impact is this: the fortnightly price anxiety - the scramble to fill up before a midnight hike - is gone. Prices now move gradually and continuously rather than in sudden large jumps. That is a genuine quality-of-life improvement even if the prices themselves are currently higher than many would like.

For the broader economy, daily pricing means Pakistan's domestic fuel costs are now fully connected to global oil markets in real time. When the peace deal holds and Iranian oil supply increases, Pakistani petrol prices will fall daily rather than waiting for a fortnightly review. When geopolitical tensions push oil up, prices will rise immediately rather than accumulating into a painful fortnightly shock. The new system is more honest, more transparent, and ultimately more stable - even if it feels more volatile day-to-day.

One practical note: a Rs70 decrease was effective from 24 July 2026 under the daily mechanism, bringing some relief. Check the OGRA portal or major Pakistani news sites each morning if your family or business needs to plan around fuel costs - the days of checking prices fortnightly are over.

The SBP decides on interest rates Monday. 97% of analysts expect a hold at 11.5%. Here is what is at stake and what it means for your money.

What happened

The State Bank of Pakistan's Monetary Policy Committee is expected to meet on Monday 27 July 2026. In a poll conducted by Topline Securities, 97% of respondents expect the policy rate to remain unchanged at 11.5%. The remaining 3% anticipate a 100 basis point cut. The SBP is expected to keep its benchmark policy rate unchanged as escalating geopolitical tensions in the Middle East and rising oil price risks overshadow improving domestic inflation and mounting arguments for monetary easing, according to market experts.

Why it matters

This is the most consequential domestic economic decision of the past month. To understand the stakes, here is the full picture. The SBP raised rates by 100 basis points to 11.5% on 27 April - a surprise hike driven by the Middle East oil shock pushing inflation to double digits. Since then, the peace deal was signed, oil prices have fallen from $120+ to the $75-85 range, and inflation has started to turn. Following the signing of the US-Iran MOU on June 18, the easing of geopolitical tensions and softer international oil prices led market participants to increasingly price in cumulative rate cuts of 100-150 basis points over the next two to three MPC meetings.

So why is a hold still the overwhelming consensus? Topline expects inflation to remain well contained but warns that heightened geopolitical uncertainty and the recent rebound in oil prices warrant a cautious approach before considering any policy easing. Inflation is expected to average 7.0-8.0% during FY27. The daily petrol pricing mechanism introduced on 17 July means any spike in global oil prices feeds into domestic inflation within days - not weeks. The SBP cannot afford to cut rates and then watch inflation re-accelerate because of a Middle East flare-up. Caution is rational given the environment.

The June 15 meeting held at 11.5% with exactly this reasoning - the decision came after the central bank had raised the rate by 100 basis points in its previous meeting on April 27, against market expectations at the time, with Monday's announcement reflecting a cautious approach amid mixed signals on inflation and external risks.

What it means for you

Three scenarios for Monday and what each means for your finances.

Scenario 1 - Hold at 11.5% (97% probability). No immediate change to any RDA fixed deposit rates or Naya Pakistan Certificate yields. The current elevated rate environment continues, meaning new fixed deposits opened now still offer attractive returns. For the KSE-100, a hold is already priced in - expect minimal market reaction. For the rupee, broadly stable.

Scenario 2 - Cut of 100bps to 10.5% (3% probability). A surprise cut would be a significant signal that the SBP believes the inflation threat has passed. The KSE-100 would rally sharply - lower rates boost corporate valuations. The rupee might weaken slightly initially. For anyone holding RDA fixed deposits, your locked-in rate remains protected. For anyone with fresh cash to deploy into PKR instruments, act before Monday if you want to lock in current rates - a cut would reduce yields on new deposits immediately.

Scenario 3 - Hike (0% probability). Nobody expects this. If it happened, it would signal severe inflation concern - markets would sell off sharply. Ignore this scenario.

Rs21 - the total increase in Pakistan's petrol price since 27 June 2026, since the transition to daily pricing began. This is the cumulative effect of daily micro-adjustments driven by a modest Brent crude recovery from its June lows. It is a fraction of the Rs159 fall that preceded it - from the April peak of Rs458 to the June low of Rs299. The direction of travel for petrol prices remains structurally downward as Iranian oil supply returns to the market. The Rs21 rise is a bump on that road, not a reversal.

⚡ THE QUICK THREE

🏠 EXPAT CORNER - This week’s practical tip

The SBP decides Monday. What should happen with a RDA account?

This is a genuinely time-sensitive decision this week and the answer depends on your situation.

The current SBP rate is 11.5%. Fixed deposit rates at major Pakistani banks through RDA accounts are typically set at 50-100 basis points below the SBP rate - so roughly 10.5-11% for a six-month or twelve-month PKR fixed deposit right now. That is dramatically higher than anything available in a UK savings account and significantly above Pakistan's expected FY27 inflation of 7-8%, meaning the real return is positive.

If the SBP holds on Monday - as 97% of analysts expect - these rates remain available next week and the week after. There is no urgency from that scenario. If the SBP surprises with a 100bps cut, the rates on new deposits will fall immediately. Existing fixed deposits are not affected - only new ones opened after the announcement.

The practical framework: if you have been sitting on the fence about opening a PKR fixed deposit in your RDA and you have cash available, this weekend is a reasonable moment to act. Not because a cut is likely - it almost certainly is not - but because the rate environment is the most attractive it has been in years and there is no cost to acting before Monday rather than after.

We will cover Monday's SBP decision in a special midweek update if there is a surprise. Otherwise the full analysis will appear in next week's issue.

SBP rate decision: Monday 27 July, expected to be announced mid-morning Pakistan time. Hit reply - what do you most want to know about the decision and what it means for your finances?