💱 THE RUPEE RATE
Pair | Rate | Change |
|---|---|---|
GBP / PKR | 366 | → Increased |
USD / PKR | 277 | → Stable |
AED / PKR | 75 | → Stable |
SAR / PKR | 75 | → Stable |
For every £1,000 you send home this week, your family receives approximately Rs 366,000. Rates checked 10th October 2026
📈 KSE-100 THIS WEEK
The KSE-100 closed the week at approximately 168,760 on Friday 9 October - up from 168,460 on Tuesday but down sharply from its recent high above 177,000. The index gained 2,593 points or 1.56% on Tuesday 6 October as investors bet on a positive IMF review outcome. It then shed over 1,100 points on Thursday as Middle East shipping attacks pushed Brent higher and triggered a broad sell-off. Friday saw a modest recovery as the IMF staff-level agreement announced on 7 October was fully digested by the market. Year-on-year the index remains up approximately 19%. The market is processing two competing forces simultaneously - the structural positive of the IMF deal and the tactical negative of rising oil prices. The IMF resolution wins in the medium term.
STORY 1 — THE BIG ONE
Pakistan and the IMF just reached a staff-level agreement unlocking $1.2 billion. Here is exactly what happened, what the IMF said - and what it means for the next twelve months.
What happened
Pakistan and the International Monetary Fund reached a staff-level agreement on 7 October 2026, covering the fourth review of the 37-month Extended Fund Facility and the third review of the 28-month Resilience and Sustainability Facility. The agreement was announced in a formal IMF press release on 8 October. Upon approval by the IMF Executive Board - which is the formal sign-off that turns the staff-level agreement into actual disbursement - Pakistan will receive approximately $1 billion under the EFF and $210 million under the RSF, a combined $1.21 billion. Total disbursements under the two arrangements will then reach approximately $5.7 billion. The IMF team, led by Mission Chief Iva Petrova, held discussions in Karachi and Islamabad from 23 September to 7 October - fifteen days of intensive review. The talks also covered the 2026 Article IV Consultation - the IMF’s annual health check of Pakistan’s entire economy.
The IMF confirmed that Pakistan’s economic programme remains broadly on track. IMF Mission Chief Petrova explicitly said Pakistani authorities have successfully navigated the impact of the Middle East conflict, and strong policies have helped preserve macroeconomic stability, adding that sovereign rating upgrades and renewed international market access also point to stronger policy credibility.
Why it matters
The fourth EFF review is the most significant review yet for two reasons. First, it covers the period that included the Middle East oil shock - from February through June, when Brent briefly hit $120+, Pakistan’s import bill surged, inflation spiked to 11.7%, and every external account was under pressure. The IMF looked at how Pakistan managed that shock and concluded the programme remained broadly on track. That is a meaningful validation - it means the government did not abandon fiscal discipline when the crisis hit, which is exactly what previous Pakistani governments have done under stress. Second, this is the review where the IMF completed its 2026 Article IV Consultation - the annual assessment of Pakistan’s entire economic framework, read by every international investor who wants to understand Pakistan’s structural position. Its conclusions - that macroeconomic stability has been maintained, reserves have risen to $21.5 billion, and the credit rating upgrades reflect stronger policy credibility - are the most authoritative external endorsement of Pakistan’s economic recovery available.
The IMF was not uncritical. It explicitly called for the SBP to keep policy appropriately tight so inflation returns durably to its target range - a signal that rate cuts are not yet endorsed by the Fund. It called for continued reforms in taxation, public financial management, social protection, the exchange rate regime, and the energy sector. The fuel relief scheme - which the IMF specifically cited as the appropriate mechanism for targeted support without cutting the petroleum levy - was noted as an example of the right approach to fiscal policy under pressure.
Gross reserves at $21.5 billion at end-September - confirmed in the IMF statement itself - give Pakistan more than three months of import cover. The Finance Minister confirmed this figure on 6 October, calling it the highest reserve level ever recorded in Pakistan’s history.
What it means for you
The IMF deal confirmation has three direct implications for expat readers. First, the rupee is structurally supported for the next quarter. When Pakistan passes an IMF review, it signals to international investors that the country is meeting its fiscal and monetary commitments - which reduces the risk premium on the rupee and attracts capital inflows. The USD/PKR rate at 277 this week reflects that confidence. Second, the $1.21 billion disbursement - once the Executive Board approves it, typically four to six weeks after the staff-level agreement - goes directly into the SBP’s reserves, pushing them further above $21.5 billion. Higher reserves mean a more stable rupee means your remittances land in a more predictable exchange rate environment. Third, the IMF’s explicit endorsement of Pakistan’s policy framework - including the credit rating upgrades and the targeted fuel relief scheme - gives international institutions and bilateral lenders the confidence to maintain their own financing commitments to Pakistan. The $6 billion in friendly country rollovers in July, the Saudi deposits, the CPEC investments - all of these are partly contingent on the IMF programme remaining on track. It is.
STORY 2 — THE ONE YOU NEED TO KNOW
Pakistan’s Financial Inclusion Index just rose to 59.5. Here is what that means - and why it matters for every expat sending money home.
What happened
The State Bank of Pakistan released the Pakistan Financial Inclusion Index results for calendar year 2025 on 7 October 2026. The P-FII rose to 59.5 in 2025, up from 58.1 in 2024. The improvement was driven primarily by the Usage sub-index - meaning more Pakistanis are actively using financial services, not just theoretically having access to them — followed by gains in the Access and Quality sub-indices. The SBP attributed the progress to digital initiatives under the National Financial Inclusion Strategy 2024-28, specifically citing RAAST merchant onboarding and the wider payment ecosystem, the introduction of digital banks, and account-opening drives. Consumer-oriented financial literacy efforts were also highlighted as supporting factors.
Why it matters
Financial inclusion - the proportion of the population with access to and actively using formal financial services - is one of the least glamorous but most structurally important economic metrics in Pakistan. Here is why it matters for Daily Rupee readers specifically.
Pakistan’s informal financial sector has historically been a drain on the economy. When a Pakistani household keeps savings in cash rather than a bank account, those savings are not available for lending to businesses. When a vendor accepts only cash rather than RAAST or a card, every transaction is invisible to the tax system. When a worker receives wages in cash rather than a bank transfer, they have no credit history, no ability to access a mortgage or a business loan, and no safety net beyond family and community.
The jump from 58.1 to 59.5 on the P-FII reflects real-world changes. RAAST - Pakistan’s central bank-operated instant payment system - is now processing millions of transactions daily and has expanded merchant onboarding rapidly. Digital banks have launched with fully remote account opening, targeting the 100 million-plus adult Pakistanis who remain unbanked. Account-opening drives - including the push to get women into the formal financial system, where the gender gap remains significant - have added millions of new account holders.
For remittances specifically, financial inclusion is the mechanism that determines whether the money you send home can be invested, saved, or lent rather than simply spent immediately. When your recipient has a bank account with a debit card linked to RAAST, they can receive your transfer instantly, save a portion in a savings account, pay utility bills digitally, and build the credit history that eventually allows them to access housing finance or a business loan. When they receive cash through an agent, none of that is possible. The financial inclusion improvement is the infrastructure on which remittance value-add is built.
What it means for you
Three practical takeaways. First, if you send money home through Wise or ACE Money Transfer, ask your recipient whether they are receiving it directly into a bank account or collecting cash. Direct-to-account is faster, safer, and more financially empowering - it helps build their credit history. If they are collecting cash, encourage them to open a mobile wallet or RAAST-enabled account this month. Second, the expansion of digital banking in Pakistan means your relatives can now access digital investment products, savings accounts, and payment services from their phones without visiting a branch. Third, the 59.5 index score - against a target of approximately 70 by 2030 - tells you that financial inclusion is on a trajectory that will materially change the economic lives of the families expats are supporting. Each year the index improves, the money you send home works harder.
🔢 ONE NUMBER
$5.7 billion - the total amount Pakistan will have received from the IMF under the current EFF and RSF arrangements upon approval of the fourth review disbursement. The $7 billion EFF was approved in September 2024. Pakistan has now drawn down $5.7 billion of it - 81% of the total programme - in just over two years. Each tranche released represents a quarterly review passed, fiscal targets met, monetary policy maintained, and reform commitments honoured. For a country that has come to the IMF 25 times in its history without consistently completing programmes, the consistency of execution under this EFF - through a near-default, a war, an oil shock, and double-digit inflation - is the most significant change in Pakistan’s fiscal behaviour in decades.
⚡ THE QUICK THREE
Finance Minister Aurangzeb confirmed Pakistan is targeting 4% GDP growth for FY27 - speaking at a UNDP event in Karachi on 6 October, he said the economy had been contracting three years ago and is now projected to grow 4% this year, emphasising the goal of responsible growth to avoid boom-and-bust cycles. He also mentioned Turkish company interest in the DISCO privatisation - confirming that international industrial investors are in active conversations about Pakistan’s power sector. The 4% target aligns with the government’s budget projections but sits above the ADB and IMF estimates of 3.5-3.7%, so the outturn will be closely watched through the year.
Pakistan’s bank deposits rose 14% to Rs39.24 trillion - confirmed by The News International this week. Rs39.24 trillion in bank deposits represents a significant increase and tells you that Pakistanis are increasingly parking savings in the formal banking system rather than cash or property. For the SBP, growing deposits mean a deeper domestic funding base, less reliance on external borrowing, and more capacity to lend to the private sector. For individual depositors, it is a validation that the banking system is trusted - which is itself partly a consequence of the financial inclusion improvements covered in Story 2.
The IMF noted Pakistan’s health and education spending rose from 2.2% of GDP in FY24 to 2.5% in FY26 - a 0.3 percentage point improvement representing approximately $1.3 billion more spent on schools and hospitals in real terms. This figure tends to be overlooked in coverage that focuses on reserve levels and exchange rates. For expat readers whose families rely on Pakistan’s public services - schools, hospitals, roads - this is the metric that most directly measures whether economic stabilisation is translating into improved daily life. The direction is right. The absolute level of 2.5% of GDP remains far below regional peers like India at 4.5% and Bangladesh at 3.1%. The work is far from done.
🏠 EXPAT CORNER - This week’s practical tip
The IMF just passed Pakistan’s fourth review. What does that mean for your money right now - and for the rest of FY27?
The IMF staff-level agreement is the most structurally significant domestic financial event of the past month. Here is the honest framework for what it means for each of the financial decisions expat readers commonly face.
Sending money home regularly: Your pounds buy slightly more rupees than they did seven days ago. The IMF deal removes one of the key tail risks - a programme breakdown that could have triggered a reserves crisis and sharp devaluation.
RDA fixed deposits: the IMF’s explicit instruction that the SBP should keep policy appropriately tight tells you rate cuts are not coming as quickly as many hoped. The IMF wants inflation back in the 5-7% target range before endorsing easing. That means the current 11.5% SBP rate - and the elevated fixed deposit returns it supports - may persist longer than previously expected. If you have cash in your RDA savings account earning the variable rate, moving it into a twelve-month fixed deposit remains the right call. The window of double-digit PKR yields is staying open longer, not closing faster.
Property investment in Pakistan: the IMF’s endorsement of Pakistan’s economic trajectory - combined with the Finance Minister’s 4% growth target, the credit rating upgrades from both S&P and Moody’s, and $21.5 billion in reserves - provides the most supportive macro backdrop for Pakistani property that we have seen since this newsletter launched. If you have been considering property in Lahore, Karachi, or Islamabad, the picture this week is as constructive as it gets. The caveat remains Middle East oil price volatility - factor it in on your financing assumptions.
Stock market: the KSE-100 at 168,760 with a forward P/E of 8x and AKD’s December target of 263,800 remains compelling on a 12-month view. The IMF deal removes the programme breakdown risk. The next catalyst is the Executive Board approval of the disbursement - typically four to six weeks after the staff-level agreement, so likely in November. Markets tend to rally in anticipation of money arriving, not just when it lands.
One final note: the IMF’s completion of the 2026 Article IV Consultation is being closely read by international investors and rating agencies right now. Its conclusions feed directly into S&P and Moody’s decisions on Pakistan’s next credit rating step. The Finance Minister’s B+ target for September 2027 just became more credible, not less.
IMF Executive Board approval: expected November 2026. Next SBP rate decision: November 2026. Hit reply!