💱 THE RUPEE RATE

For every £1,000 you send home this week, your family receives approximately Rs 374,000. Rates checked 12 September 2026

📈 KSE-100 THIS WEEK

The KSE-100 has been trading cautiously ahead of Sunday's SBP rate decision, holding broadly around the 177,000-178,000 range. Markets are in a pre-decision holding pattern - the index will move sharply on Monday morning depending on what the MPC announces. With 87.5% of analysts expecting a hold, a hold is largely priced in and the reaction may be muted. A surprise cut would trigger a sharp rally. A surprise hike - which 12.5% of respondents flagged as possible - would trigger a sharp selloff. The all-time high of 191,032 remains the medium-term target.

Pakistan received $3.66 billion in remittances in August. UK Pakistanis specifically sent 22% more than a year ago. Here is the full breakdown - and what it means the full year is tracking toward.

What happened

Pakistan received $3.656 billion in workers' remittances in August 2026, marking a 16.5% increase year-on-year from $3.14 billion in August 2025, according to data released by the State Bank of Pakistan on Wednesday 9 September. Remittances also increased 0.7% month-on-month from $3.63 billion in July. Cumulative workers' remittances for the first two months of FY27 reached $7.29 billion - up 14.7% from $6.35 billion in the same period last year.

The breakdown by corridor tells the story in granular detail. Saudi Arabia contributed $873.5 million - up 19% year-on-year. The UAE sent $749.8 million - up 17%. The United Kingdom contributed $563.7 million - up 22% from $463 million a year earlier. The United States sent $308.9 million - up 16%. EU countries contributed $496 million - up 15%. Topline Securities now expects total FY27 remittances to reach $43.7 billion, in line with the SBP's own outlook of approximately $44 billion for the fiscal year.

Why it matters

The UK number - up 22% year-on-year to $563.7 million in a single month - is the one that matters most to readers of this newsletter. The UK is the third-largest source of remittances to Pakistan globally, behind only Saudi Arabia and the UAE. In the first two months of FY27, cumulative UK remittances reached $1.12 billion - nearly $560 million per month on average. That is a run rate of approximately $6.7 billion annually from the UK alone.

To understand what is driving the surge, you need to look at what changed between August 2025 and August 2026. The short answer: the Middle East crisis paradoxically accelerated formal remittance flows. When the rupee was under pressure and Pakistan's economy appeared stressed, overseas Pakistanis increased transfers through official channels - partly to support family members facing higher living costs, and partly because the formal channel rates improved as the SBP intervened to support the currency. The habits formed during the crisis have persisted into the stabilisation period.

The broader remittance story is equally striking. Pakistan's cumulative FY27 remittances are running 14.7% ahead of last year's already-record pace. Last year's full-year total was $41.6 billion. If the 14.7% growth rate sustains - which the $43.7-44 billion FY27 forecasts assume - Pakistan will receive over $3 billion more in remittances this year than last year. That additional $3 billion goes directly into reserves, the current account, and family household incomes across Pakistan.

What it means for you

The UK's $563.7 million in August tells you something important: British Pakistani remittance behaviour has structurally shifted toward official channels. If you are sending money through Wise, ACE Money Transfer, or your bank's international transfer service, you are part of a $6.7 billion annual flow from the UK alone - one of the most important economic relationships between the UK and any developing country in the world.

Two practical notes. First, the SBP's own $44 billion FY27 remittance target implies the government is counting on overseas Pakistanis to maintain this pace. It is not a given - if the UK economy slows or Pakistani expat employment falls, these flows can reverse. Send through official channels consistently. Second, the 22% UK growth rate is the highest of any major corridor this month - higher than Saudi Arabia at 19%, the UAE at 17%, and the US at 16%. British Pakistanis are leading the remittance surge. That should be a source of genuine pride given what these flows mean for the country's economic stability.

A major international research firm just said Pakistan's rupee will not be devalued in 2026. Here is exactly what they said - and the honest caveats that come with it.

What happened

BMI, a Fitch Solutions company and one of the most widely followed emerging market research firms, pushed back its forecast for a depreciation of the Pakistani rupee to 2027, revising its end-2026 projection to Rs278 per US dollar from Rs288 previously, citing improved foreign exchange buffers, tight monetary policy, and better access to international capital markets. The report, published on 11 September, said it now expects policymakers to hold the rupee at around Rs278 per dollar through 2026 instead of devaluing to Rs288 as previously forecast. BMI noted that the near-term risk of a disorderly devaluation has eased with Pakistan's FX buffers continuing to improve despite higher energy import costs and sizeable external debt repayments. The firm expects the rupee to remain around Rs278 per dollar through 2026, before weakening to Rs292 per dollar by end-2027 as concerns over export competitiveness and the widening trade deficit put pressure on the currency.

Why it matters

BMI revising its rupee forecast is significant for two reasons. First, it is a credible independent signal - Fitch Solutions is not a Pakistani government agency or a brokerage with a vested interest in promoting Pakistan. When a firm like BMI revises its view toward rupee stability, it reflects a genuine reassessment of Pakistan's fundamentals based on data rather than optimism. Second, the specific reasoning they cite is worth examining carefully because it tells you what is actually holding the rupee up.

Three factors: improved foreign exchange buffers - reserves now above $22 billion, sixfold growth from the 2023 low; tight monetary policy - the SBP's 11.5% rate makes rupee-denominated assets attractive to yield-seeking capital; and better access to international capital markets - the Eurobond in April, the Panda bond in May, and the S&P upgrade to B all signal Pakistan can borrow internationally without distress pricing.

The honest caveat is in BMI's 2027 language. The firm expects the rupee to weaken to Rs292 per dollar by end-2027 - a depreciation of approximately 5% over the following twelve months - as concerns over export competitiveness and the widening trade deficit put pressure on the currency. Strong remittance inflows have so far prevented a sharper deterioration in the external position but are unlikely to offset a widening trade deficit indefinitely. This is the structural challenge that no amount of stabilisation has yet resolved: Pakistan imports nearly twice what it exports, and that gap cannot be covered by remittances forever. The government's $100 billion export target by 2035 is the long-term answer. The GSP+ EU situation we covered in Issue #13 is the near-term risk to that answer.

What it means for you

For anyone monitoring the GBP/PKR rate and making remittance or investment decisions, BMI's revised forecast gives you a credible baseline: Rs278 per dollar through end-2026, which at current GBP/USD rates translates to approximately GBP/PKR in the 365-375 range - broadly where it has been for ten weeks. The rupee is not going to dramatically strengthen or weaken in the near term according to the most credible available forecast. For practical purposes: the rate you send money at today is approximately the rate you will get in December. There is no compelling case to urgently accelerate or delay transfers based on anticipated exchange rate movements in 2026.

The 2027 picture is different. If BMI is right that the rupee weakens to Rs292 per dollar by end-2027, that would translate to approximately GBP/PKR in the 380-390 range - a meaningful weakening from today's 371. For anyone making multi-year PKR investment decisions - property, long-term fixed deposits - that trajectory is worth incorporating into your thinking. A rupee that weakens 5% against the dollar in 2027 erodes the GBP-denominated return on any PKR-denominated investment by a commensurate amount.

$7.29 billion - Pakistan's total remittance inflows in just the first two months of FY27, July and August 2026. Up 14.7% from $6.35 billion in the same two months last year. If this pace holds for the full twelve months of FY27, Pakistan will receive approximately $43.7 billion - a new all-time record and $2 billion above last year's record of $41.6 billion. Every reader of this newsletter who sends money home through official channels is contributing to that number. The UK's $1.12 billion in two months - $564 million per month - makes British Pakistanis the third-largest remittance-sending community in the world to Pakistan, behind only Saudi Arabia and the UAE.

⚡ THE QUICK THREE

🏠 EXPAT CORNER - This week’s practical tip

The SBP decides on Sunday. UK remittances are up 22%. BMI says no devaluation in 2026. Here is what to do with all of this information.

Three pieces of significant news landed this week and they point in slightly different directions. Let me map them clearly.

The remittance data - $3.66 billion in August, UK up 22% - is unambiguously positive for Pakistan's external position and the rupee. More dollars flowing in through official channels means more reserve support and less currency pressure. If you are already sending through Wise or ACE Money Transfer, you are contributing to a trend that is materially supporting the stability of the currency you are converting into.

The BMI forecast - rupee stable at Rs278 per dollar through 2026, then weakening to Rs292 by end-2027 - is the most important piece of context for medium-term financial planning. It says: do not rush to convert GBP to PKR now on fear of missing a better rate, because the rate is not changing much this year. But also do not defer indefinitely, because the 2027 trajectory is toward modest rupee weakening.

The SBP rate decision on Sunday - 87.5% probability of a hold at 11.5% - means the elevated yield environment for PKR fixed deposits continues for at least another six weeks until the next meeting. If you have been procrastinating on opening a fixed deposit in your RDA, Sunday's decision changes nothing about the urgency - the window remains open but it will not remain open indefinitely.

If you have an RDA savings account with a meaningful balance, log in today and move it into a twelve-month fixed deposit. If the SBP holds Sunday — as expected — your rate is locked in at current levels. If there is any surprise, you will have acted before the market repriced.

If you are planning a property purchase in Pakistan, the BMI forecast of rupee stability through 2026 combined with the budget's halved property withholding taxes gives you a reasonable window of entry. The caveat is the 2027 trajectory - if you plan to exit a property investment before 2028, factor in the potential rupee weakening when calculating your GBP-denominated return.

SBP rate decision: Sunday 14 September. We will cover it immediately. Hit reply -what does the rate decision mean for your specific financial situation?