💱 THE RUPEE RATE

For every £1,000 you send home this week, your family receives approximately Rs 374,000. Rates checked 18 July 2026

📈 KSE-100 THIS WEEK

The KSE-100 rose to 178,184 points on 16 July, gaining 1.65% from the previous session, though over the past month the index has declined 1.29% and remains 28.50% higher than a year ago. The index snapped its winning streak last week, declining 1.7% week-on-week, losing 3,130 points to close at 182,242, as renewed geopolitical tensions following fresh US-Iran strikes weighed on investor sentiment. Brent crude prices rose 4.7% week-on-week to $75.5 per barrel. The market is in a consolidation phase - the all-time high of 191,032 remains the target but the path there is being tested by ongoing Middle East volatility.

Pakistan's foreign exchange reserves crossed $24 billion then fell $1.2 billion in a week due to debt repayments. Here is what this means - and why the SBP governor says $20 billion by December is still on track.

What happened

The State Bank of Pakistan successfully met its foreign exchange reserves target for FY26, with its holdings surpassing $18 billion by the end of June 2026. In the last week of June, SBP reserves rose significantly by around $2 billion. Pakistan's central bank foreign exchange reserves increased by $1.94 billion, reaching $18.47 billion during the week ended July 3, driven by government inflows. Total liquid foreign exchange reserves stood at $23.99 billion as of July 3 - the highest Pakistan has ever recorded. Then the picture shifted. During the week ended July 10, SBP's foreign exchange reserves decreased by $1.245 billion to $17.226 billion. The decline was entirely due to external debt repayments. Total liquid foreign currency reserves dropped to $22.675 billion. As of 16 July, total liquid forex reserves had stabilised at $22.676 billion.

Why it matters

The swing from $23.99 billion to $22.675 billion in a single week looks alarming at first glance. It is not. To understand why, you need to understand what Pakistan did in the last quarter of FY26. Despite making external debt repayments of around $9 billion during the last quarter alone, the central bank successfully achieved its reserve target of $18 billion. Pakistan paid out $9 billion in a quarter and still hit its reserve target. That is a fundamentally different Pakistan from the one that nearly defaulted in 2023 with reserves below $3 billion.

The SBP has increased its FX reserves from approximately $3 billion in 2023 to above $18 billion today - a sixfold increase in just over three years. Critically, the SBP purchased over $27 billion from the market over the last three years, using these funds to make debt repayments while building FX reserves. The reserve build is organic and sustainable rather than debt-financed. The SBP is buying dollars from the interbank market - not borrowing them - which is the crucial distinction between a genuine reserve build and a cosmetic one.

SBP Governor Jameel Ahmad said reserves would hit a new all-time high at $20.2 billion by end of December 2026, adding that FX reserves had grown six times to $18.4 billion by end of FY26 from below $3 billion in February 2023. The weekly fluctuations around debt repayment dates are normal and expected. The direction of travel is firmly upward.

What it means for you

The reserve story connects directly to the rupee story this week. When the market sees that the SBP has $17-18 billion in reserves and is buying dollars actively, it has confidence in the currency. That confidence is what is driving the rupee to a high. For expats sending money home, a stronger rupee means slightly fewer rupees per pound. That is a modest move but directionally it tells you Pakistan's external position is improving structurally.

If the SBP hits its $20 billion target by December as projected, expect the rupee to remain well-supported through the end of the year. The window of GBP/PKR above 375 that existed during the worst of the Middle East crisis is likely behind us. For anyone with large rupee-denominated holdings, this is a positive structural signal - your PKR is in a more stable environment than at any point in the past three years.

The EU just warned Pakistan it could lose €732 million in annual trade benefits. Here is what GSP+ is, why it matters, and what Pakistan needs to do.

What happened

The European Union published its fifth monitoring report on the Generalised Scheme of Preferences on 17 July 2026, jointly released by the European Commission and the EU High Representative for Foreign Affairs and Security Policy. The report confirmed that Pakistan continues to benefit significantly from the GSP+ trade scheme but warned that the country has made uneven progress in meeting the human rights, governance, labour and environmental commitments required to retain the preferential trade status. The EU said Pakistan experienced limited positive change during the 2023 to 2025 monitoring period while regressing in several key areas.

Pakistan has been the largest beneficiary of the EU's GSP+ scheme since joining in 2014. The country exported €7.5 billion worth of GSP+ eligible goods to the EU in 2024, mainly textiles and clothing, benefiting from an estimated €732 million in tariff exemptions. Pakistan's exports to the EU have increased by more than 91% since receiving GSP+ status, with average utilisation of available preferences at 95%. The EU Ambassador to Pakistan also warned this month that access to GSP+ was neither guaranteed nor automatic, signalling a more conditional approach from Brussels. The next formal review is in 2027.

Why it matters

GSP+ is one of Pakistan's most valuable economic assets and one of the least understood outside the trade sector. Here is what it actually is. The EU's Generalised Scheme of Preferences allows developing countries to export goods to Europe at zero or reduced tariffs in exchange for meeting commitments on human rights, labour rights, environmental protection and governance. Pakistan joined in 2014 and it transformed the country's export relationship with Europe - textiles and garments became dramatically more competitive because Pakistani exporters were not paying the same import duties as competitors from countries without GSP+ status.

The numbers tell the story. The EU is Pakistan's largest export market, accounting for 28% of total exports. Textiles and clothing make up around 70-76% of Pakistani exports to the EU. About 90% of Pakistan's exports to the EU remain eligible for GSP+ preferences. €732 million in annual tariff exemptions is not a rounding error - it is a structural subsidy to Pakistan's manufacturing sector that keeps millions of textile workers employed and keeps Pakistani garments price-competitive on European shop floors. Without it, Pakistani textiles would face tariffs of 9-12% and would lose significant market share to competitors overnight.

The EU's concerns are serious and specific. The report cited regression in several key areas of human rights and governance during the 2023-2025 monitoring period. The EU Ambassador's warning that access is "neither guaranteed nor automatic" is notably stronger language than Brussels has historically used with Islamabad. There is also a competitive dimension that makes this more urgent: the EU this year offered India - Pakistan's primary textile competitor - expanded preferential market access, directly intensifying the pressure on Pakistani exporters to retain every advantage they currently hold.

What it means for you

If you have family working in Pakistan's textile sector - which directly employs over 15 million people and accounts for nearly 60% of Pakistan's total export earnings - this story touches their livelihoods directly. A loss of GSP+ would not happen overnight. The next formal review is 2027 and Brussels has historically preferred engagement over sanctions. But the language is hardening and the warning is real.

For the broader economy, losing €732 million in annual tariff benefits would squeeze Pakistan's already-thin export margins, slow the manufacturing recovery that has been one of the genuine bright spots of FY26, and put pressure on the current account at exactly the moment Pakistan has worked so hard to bring it back into balance. This is an economic risk that needs to be treated with the same urgency as an IMF review or a debt payment deadline. Watch for the government's formal response to the EU report in the coming days - it will signal how seriously Islamabad is taking this.

€732 million - the annual tariff exemptions Pakistan receives under the EU's GSP+ scheme, based on 2024 export data. To put this in context: Pakistan's entire annual IT export sector - celebrated as one of the country's great economic success stories - generates approximately $3.8 billion. The GSP+ benefit alone is worth nearly a quarter of that in saved tariff costs. It is the single most important trade policy asset Pakistan holds, and it is now under formal scrutiny. The government needs to act on the EU's specific concerns before the 2027 review - not after.

⚡ THE QUICK THREE

🏠 EXPAT CORNER - This week’s practical tip

The Roshan Digital Account just hit $13.4 billion in total inflows and almost one million accounts. If you do not have one yet, here is exactly why to open it this week.

Pakistan received $306 million in gross inflows under the Roshan Digital Account in June, slightly down from $312 million in May. The RDA has attracted a total of $13.365 billion in funds from September 2020 to June 2026. The number of digital accounts reached 946,201 as of June - almost one million overseas Pakistanis formally connected to Pakistan's financial system in a way that did not exist six years ago. Inflows under the Roshan Digital Account reached $2.8 billion during FY26 alone.

$13.4 billion in six years from a standing start of zero. When the RDA launched in September 2020, it was a genuinely novel concept - allowing overseas Pakistanis to open bank accounts remotely, hold both PKR and foreign currency, invest in government securities and the stock market, and send money home, all from outside Pakistan without visiting a branch.

If you do not yet have a Roshan Digital Account, this week's data gives you three concrete reasons to open one now.

First, $13.4 billion in total inflows means the scheme is mature and trusted - this is not a pilot programme, it is a proven platform used by nearly one million people. Second, with the SBP rate at 11.5%, Naya Pakistan Certificates and fixed deposits available through RDA are offering returns that significantly beat anything available in a UK savings account right now. Third, the reserve position improving structurally means the PKR you hold in an RDA is in its most stable environment in years.

The practical steps: visit your Pakistani bank's website - HBL, MCB, UBL, Meezan, or Habib Bank - and look for the RDA section. All five offer fully online onboarding from the UK with no need to visit a branch. You will need your NICOP or passport. The process takes 15-20 minutes. Do it this weekend.

One more thing worth noting: the Sohni Dharti Remittance Programme has been discontinued as we covered last week. If you accumulated points before June 30, you have until June 30, 2027 to redeem them. Log in and check your balance before you forget.

Next petrol revision: 26 July. Next SBP rate decision: August 2026. Hit reply - what do you most want covered next week?