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Sound investment decisions are built on economic understanding. At Chakor, our Economy section covers the macroeconomic trends, policy shifts, market movements, and financial developments that directly influence real estate, construction, and investment across Pakistan.

Whether you are tracking inflation, interest rates, or GDP growth, we break down what matters and what it means for your decisions.

CategoriesNews Budget Economy Tax

FPCCI proposes cut in salaried tax rate from 35% to 30% in budget 2026-27

ISLAMABAD: The Federation of Pakistan Chambers of Commerce and Industry has proposed major tax relief for the salaried class in the upcoming federal budget 2026-27.

In its budget proposals submitted to the Ministry of Finance, FPCCI recommended reducing the maximum income tax rate for salaried individuals from 35 percent to 30 percent. The business body also proposed abolishing the 9 percent surcharge currently imposed on salaried taxpayers.

FPCCI said the relief is needed because many salaried people are facing rising living costs due to inflation. It added that higher taxes have reduced the take-home income of workers, making it harder for families to manage everyday expenses.

The chamber also presented several other tax-related proposals for the business community. These include abolishing super tax, restoring the final tax regime for goods transport, and continuing the 25 percent export tax rate for the IT sector until 2035.

FPCCI further suggested increasing the SME turnover threshold from Rs250 million to Rs500 million. It also proposed reducing the income tax rate for manufacturers from 29 percent to 20 percent.

The proposals are aimed at reducing the tax burden on individuals and businesses, improving purchasing power, and encouraging economic activity in the country.

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CategoriesSpecial Report Economy Eid News

SBP Scales Up Digital Payments Drive for Eid-ul-Adha 2026, Expanding Coverage to 96 Cattle Markets Nationwide

SBP Scales Up Digital Payments Drive for Eid-al-Adha 2026, Expanding Coverage to 96 Cattle Markets Nationwide

Central bank deploys 22 banks, temporary transaction relaxations, and digital infrastructure in bid to reduce cash dependency during Eid trading season

Islamabad, May 16, 2026

ISLAMABAD — The State Bank of Pakistan (SBP) has launched its most expansive digital payments initiative to date ahead of Eid-ul-Adha 2026, extending its annual “Go Cashless” campaign to 96 cattle markets across the country, a near-doubling of the 54 markets covered in the preceding year. The central bank’s move signals a deliberate escalation of its efforts to digitise one of Pakistan’s largest seasonal commercial events, where billions of rupees exchange hands, predominantly in cash, over the course of just a few weeks.

A Seasonal Window for Financial Inclusion

Eid-ul-Adha, one of Islam’s most significant religious observances, is accompanied in Pakistan by an enormous surge in livestock trading. Cattle markets locally known as mandi become bustling commercial hubs in the days preceding the festival, attracting buyers and sellers from across provinces and socioeconomic backgrounds. Historically, these transactions have been conducted almost exclusively in cash, presenting considerable security risks and limiting financial traceability.

The SBP has framed the cattle market campaign as a strategic leverage point in its broader financial inclusion agenda. By targeting an event with high transaction volumes and wide public participation, the central bank is attempting to convert seasonal cash users into habitual adopters of digital payment channels. The 2026 campaign, announced on May 15, represents the most operationally ambitious iteration of this effort since its inception.

List of Cattle Markets

City Mandi Location
Bahawalpur Ahmad pur Road Near Suzuki Showroom, Bahawalpur.
Jhangi wala road Near Civil Hospital, Bahawalpur.
Yazman Road near Bahawalpur Airport, Bahawalpur.
D I Khan Main Cattle Market , Qureshi Moor , D.I Khan
Faisalabad Model Cattle Market, Niamoana, Samundari Road, Faisalabad
Cattle Market 85 Jhaal, Silanwali Road, Sargodha
Bhakkar Road, By Pass Jhang
Cattle Market Adjacent to New Sabzi Mandi, Chiniot.
Gujranwala Mafiwala, Sialkot Bypass, Gujranwala
Khiali Bypass, Sheikhupura Road, Gujranwala
Imtiaz Store, Wapda Town, Near Chan da Qila (Lahore Bypass), Gujranwala
Hyderabad Main Hatri Bypass opposite Ayub Restaurant Hyderabad
Bismillah City Unit #10 latifabad Hyderabad
Near Indus Hospital main Hyderabad – Tando Muhammad Khan Road, district Tando Muhammad Khan
Islamabad Near Facto Cement Factory, Sangjani, Islamabad
Sector I-15 Markaz, Islamabad
Bhara Kahu, Islamabad
Near Sultana Foundation Lehtarar Road, Islamabad
Rawalpindi Bhatta Chowk intersection of Twin Cities
Zia Masjid Express High way Islamabad
Rawat Rawalpindi
Karachi Northern Bypass Mandi (Taiser Town, District West)
Liyari Express Way Cattle Market
Northern Bypass Gai Mandi
Malir Cattle Market
Korangi Crossing Cattle Market
Cattle Fiesta, DHA Phase 1
Lahore Shahpur Kanjran Cattle Market, Lahore
Nishter Zone at LDA City (near Sidhar Village at Kahna Kachha, Defence Road Lahore
road Lahore
Cattle Market Burki Road Lahore
Raiwand Cattle Market Lahore
Multan Billi Wala by-pass Multan
Lahore Morr Khanewal
Fatima Town Multan
Bakar Mandi Haji Shareef Chowk Multan
Muzaffarabad Maweshi Mandi located at Talhi Mandi, Muzaffarabad
Langarpura Cattle Market,Chikoti Road Langarpur Muzaffarabad
Bela Noorshah Cattle Market, Bela Noorshah
Peshawar Mal Mandi Ringroad
Kala Mandi
Palosai Mandi
Syphen Cattle Market
Peshawar Cattle Mandi
Quetta Eastern Bypass
Western Bypass
Airport Road
Spiny Road
Sialkot Aimanabad Road, NawaPind, Sialkot
Sambrial-Wazirabad Road, Near UGOKI, Sialkot
Pasrur Bypass Jassar Wala Tehsil Daska
Sukkur City Point , Sukkur
Thehri, Khairpur
Ali Wahan, Rohri
Main Shikarpur Road, Jacobabad

Operational Infrastructure and Participating Institutions

Under the 2026 framework, 22 commercial banks will establish dedicated camps and kiosks within their assigned markets. Bank representatives will be tasked with on-the-spot account opening for cattle sellers, livestock transporters, and allied service providers, while simultaneously deploying QR code-based payment terminals to facilitate instant digital transactions.

To address cash access needs in parallel, the central bank will also deploy mobile banking vans, automated teller machines (ATMs), and Cash Deposit Machines (CDMs) at market sites where infrastructure permits.

Critically, the SBP has introduced temporary relaxations on transactional and account balance limits, effective from May 14 through June 5, 2026, to accommodate the elevated payment volumes typical of the Eid trading season.

Expert Analysis: Ambition, Execution, and Structural Challenges

Financial sector analysts broadly welcome the initiative as a meaningful step toward broadening digital financial access, while noting that the operational challenges of converting informal, trust-based livestock markets to cashless models should not be underestimated.

“The SBP deserves credit for the consistency and scale of this campaign,” said a Karachi-based economist specialising in digital finance. “Doubling the number of covered markets in a single year reflects genuine institutional commitment. But the real metric is not how many markets are covered; it is the percentage of transactions within those markets that actually shift to digital rails. That data, if published transparently, would tell us whether the campaign is achieving systemic change or merely symbolic presence.”

Pakistan’s financial technology ecosystem has undergone considerable transformation in recent years, with the central bank’s own Raast instant payment system, Pakistan’s first fully interoperable instant payment system, launched in January 2021, emerging as a key enabler of zero-cost, real-time digital transfers. The SBP’s encouragement of Raast-enabled services alongside mobile banking applications and QR payments reflects an effort to consolidate these tools for public use in high-traffic informal settings.

However, analysts have flagged structural barriers that regulatory directives alone cannot resolve. Connectivity gaps in peri-urban and rural markets, low digital literacy among older cattle traders, and a deep cultural preference for physical currency in large-value livestock transactions present persistent headwinds.

“A seller moving a high-value animal sometimes worth several hundred thousand rupees often prefers cash because it offers immediacy and privacy,” noted a policy researcher at a Lahore-based development institute. “Building trust in digital systems for high-stakes, one-time transactions requires more than kiosks and QR codes. It requires demonstrable reliability, fraud protection, and peer adoption.”

Regulatory Context and National Digital Strategy

The Go Cashless campaign is situated within Pakistan’s wider national agenda to expand financial inclusion and formalise economic activity. Pakistan remains among the countries with the largest unbanked populations globally. The World Bank’s Global Findex 2025 Report identified it as one of eight countries accounting for over half of the world’s 1.3 billion unbanked adults.

Nevertheless, recent years have seen measurable progress: according to SBP data, bank account coverage has risen from 47 percent of the adult population in 2018 to around 64 percent, driven partly by the proliferation of mobile wallets and branchless banking services.

The SBP’s temporary relaxation of account and transaction limits during the Eid window is noteworthy from a regulatory standpoint. Such adjustments recognise that standard Know Your Customer (KYC) thresholds, designed for routine banking, can inadvertently exclude individuals seeking to make legitimate, high-value seasonal payments. By calibrating limits to seasonal economic realities, the central bank is attempting to reduce friction without compromising the integrity of its anti-money laundering framework.

Outlook

With Eid-ul-Adha widely expected to fall on May 27, 2026, the window for on-the-ground deployment is narrow. The success of this year’s campaign will likely be assessed not only by uptake figures but also by the SBP’s ability to retain newly onboarded customers within the formal banking system beyond the festival season. Sustained engagement rather than one-time digital transactions would represent the more durable indicator of progress toward Pakistan’s financial inclusion objectives.

The central bank has encouraged citizens to utilise mobile banking applications, branchless banking wallets, Raast-enabled services, and QR payment platforms for all Eid-related transactions, emphasising the security, convenience, and systemic benefits of reducing cash dependency in high-traffic commercial settings.

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 References

Business Desk. (2026, May 15). Eid ul Adha: SBP launches ‘Go Cashless’ campaign for cattle markets. Geo News. https://www.geo.tv/latest/664625-eid-ul-adha-sbp-launches-go-cashless-campaign-for-eid-ul-adha-cattle-markets

Profit Desk. (2026, May 15). SBP scales up Eid ul Adha Go Cashless drive; expands coverage to 96 cattle markets. Profit — Pakistan Today. https://profit.pakistantoday.com.pk/2026/05/15/sbp-scales-up-eidul-adha-go-cashless-drive-expands-coverage-to-96-cattle-markets/

Pakistan Today. (2026, May 16). SBP expands Eid ul Azha cashless payments drive to cattle markets. Pakistan Today. https://www.pakistantoday.com.pk/2026/05/16/sbp-expands-eidul-azha-cashless-payments-drive-to-cattle-markets

State Bank of Pakistan. (2026, May 14). Go Cashless — Eid ul Adha 2026 [Press release]. https://www.sbp.org.pk

RDA Inflows Hit Monthly High of $321 Million in April
CategoriesNews Budget Economy

RDA Inflows Hit All-Time Monthly High of $321 Million in April 2026

KARACHI: Roshan Digital Accounts (RDA) recorded their highest-ever monthly inflow of $321 million in April 2026, according to data released by the State Bank of Pakistan (SBP), marking a significant milestone in Pakistan’s efforts to attract diaspora investment through digital banking channels.

The April figure represents a month-on-month increase of $60 million over March’s inflow of $261 million, pushing total cumulative inflows into RDA since the scheme’s inception to $12,747 million.

Despite the record inflows, outflows also remained substantial. A total of $191 million was repatriated or locally utilised during the month, comprising $28 million in outward repatriation and $164 million deployed within Pakistan, causing the Net Repatriable Liability (NRL) to expand by $130 million in April.

On a cumulative basis, total repatriation and local utilisation now stand at $10,203 million, of which $2,056 million has been repatriated abroad while $8,147 million has been utilised domestically. The overall NRL currently stands at $2,544 million, equivalent to 19.96% of total RDA.

Within the NRL, Islamic Naya Pakistan Certificates (NPC) account for the largest share at $1,155 million, followed by account balances at $641 million, Conventional NPC at $555 million, equity investments at $123 million, and other liabilities at $70 million.

The scheme also continues to demonstrate strong year-on-year growth. Total inflows during the current financial year reached $2,184 million, compared to $1,925 million in the corresponding period last year, a rise of approximately 13.5%.

Repatriation and local utilisation during the same period came in at $1,630 million, up from $1,460 million a year earlier. On the participation front, 10,083 new accounts were opened during April alone, bringing the total number of RDA accounts to 927,483.

The record monthly inflow underscores sustained overseas Pakistani confidence in the RDA platform and signals continued momentum in foreign currency mobilisation through digital channels heading into the final stretch of the fiscal year.

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CategoriesBudget Economy Investment News Special Report Tax

Pakistan and IMF Chart Course for Budget 2026–27: A Critical Analysis

Pakistan and IMF Chart Course for Budget 2026–27: A Critical Analysis

By News Desk | May 14, 2026

Pakistan’s Finance Minister Senator Muhammad Aurangzeb met with a visiting International Monetary Fund (IMF) mission on May 13, 2026, in Islamabad for high-level discussions on the country’s macroeconomic outlook, the upcoming federal budget for fiscal year 2026–27, and the broader structural reform agenda. The meeting comes at a pivotal moment: the IMF had just approved a fresh disbursement of approximately $1.3 billion five days earlier, and Pakistan is navigating a complex economic environment shaped by external debt pressures, a volatile global commodity landscape, and the ongoing fallout from the Middle East conflict.

The Meeting: What Was Discussed

The talks, held between Minister Aurangzeb and IMF Mission Chief Ms Iva Petrova, covered four broad areas: macroeconomic stabilisation, upcoming budget preparations, structural reform priorities, and Pakistan’s engagement with international development partners.

According to the Ministry of Finance, both sides exchanged views on “maintaining reform momentum, preserving macroeconomic stability, and advancing structural reforms to promote investment, productivity, and export-led growth.” 

The minister highlighted improvements in Pakistan’s external sector, citing month-on-month and year-on-year growth in remittances and exports as evidence of strengthening macroeconomic fundamentals.

Aurangzeb framed the government’s reform agenda as a long-term and technically grounded one designed to break Pakistan’s historical pattern of boom-and-bust economic cycles. He stressed the importance of structural reforms, productivity enhancement, deregulation, and improved export competitiveness. He also briefed the delegation on Pakistan’s economic cooperation with China and efforts to attract long-term foreign investment.

The meeting was attended by key institutional heads, including State Bank of Pakistan (SBP) Governor Jameel Ahmad, Finance Division Secretary Imdad Ullah Bosal, and Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial.

The $1.3 Billion Disbursement: Context and Significance

The meeting followed the SBP’s announcement that it had received SDR 914 million, approximately US$1.3 billion under two IMF programmes: the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF). This brings total disbursements under both arrangements to SDR 3,348 billion, or roughly $4.8 billion.

The IMF Executive Board had approved the disbursement on May 8, 2026, following the successful completion of the third review under Pakistan’s 37-month EFF arrangement, which was first approved on September 25, 2024. 

An additional SDR 154 million (approximately $220 million) was disbursed under the RSF, the climate-focused facility approved on May 9, 2025, aimed at helping Pakistan build resilience against natural disasters.

The funds were credited to SBP accounts on May 12, 2026, and will be reflected in Pakistan’s official foreign exchange reserve figures for the week ending May 15, 2026.

IMF Deputy Managing Director Nigel Clarke, speaking after the Executive Board meeting, offered a pointed message alongside the approval: “Pakistan needs to maintain strong macroeconomic policies while accelerating reform efforts, which are critical to managing external shocks and fostering higher sustainable medium-term growth.” Clarke specifically flagged that shocks from the Middle East conflict underline the continued urgency of structural reforms.

IMF’s Formal Assessment

In its end-of-mission statement from March 2026, following the third EFF review, the IMF noted that “programme implementation under the EFF remained broadly aligned with the authorities’ commitments through end-February 2026.” The Fund acknowledged progress on fiscal consolidation, monetary policy tightening, and energy sector reforms, while also noting that discussions on deepening structural reforms were still ongoing.

Pakistan has committed under the programme to maintaining a primary budget surplus of 1.6% of GDP for FY2026, moving toward a 2% surplus target by FY2027. The IMF has maintained these targets firmly, declining to ease them despite weak tax collection performance by the FBR earlier in the year.

IMF Mission Chief Iva Petrova acknowledged that Pakistan’s authorities “remain committed to pursuing sound and prudent macroeconomic policies to preserve the recent gains in macro-financial stabilisation, while deepening structural reforms to accelerate growth and strengthening social protection to mitigate the impact of volatile energy prices on the most vulnerable.”

Budget 2026–27: What to Expect

According to sources cited by Business Recorder, the government is unlikely to introduce new taxes in the upcoming budget, instead aiming to meet its revenue targets through enforcement and administrative measures estimated at Rs 778–780 billion. The budget is expected to offer some relief to the salaried class, with Aurangzeb reportedly seeking to lower tax rates and raise the taxable income threshold in recognition of salaried workers’ disproportionate contribution to tax revenue.

The IMF delegation is also expected to consult with the Ministry of Energy and other departments on structural reforms in the power sector and state-owned enterprises (SOEs), aligning expenditure planning and revenue targets ahead of the formal budget presentation.

Expert Opinions: Cautious Optimism Mixed With Structural Concerns

While the IMF approval has been broadly welcomed as a confidence-building signal, independent economists have urged caution.

Analysts cited by Energy Update noted that “the IMF approval will provide short-term stability to financial markets while reinforcing investor confidence in Pakistan’s economic reform agenda and long-term fiscal sustainability.” However, they stopped short of calling the situation structurally resolved.

Economist Sajid Amin, commenting on the FY2025–26 budget earlier in the cycle, which set the framework now being built upon, offered a pointed critique: “Overall, I feel the budget falls short on structural and bold reforms; it is a stabilisation budget formed to meet revenue targets. The objective or principle guiding the budget is the incoming IMF tranche.” His view reflects a broader concern that Pakistan’s fiscal decisions are being shaped primarily by programme compliance rather than domestic economic strategy.

Economist Ali Hasnain echoed this, describing the prior budget as “relatively disciplined but within the status quo,” while warning that tariff reductions favouring import-dependent industries such as auto and mobile manufacturing do little for export competitiveness and remain “a road to nowhere.”

Perhaps most critically, economist and policy analyst Dr. Nadeem ul Haque, writing in a review of Pakistan’s economic press coverage, challenged the broader reform narrative head-on: “Pakistan has been in and out of IMF programs for four decades. Which structural reforms from earlier cycles actually survived?” He argued that the IMF’s diplomatic language, “accelerating reform efforts,” masks a recurring failure to build lasting institutional capacity. 

He described repeated cycles of tax reform, energy reform, privatisation, and governance reform returning under new labels, and characterised the programme’s revenue-heavy, expenditure-light architecture as potentially counterproductive: “Raising rates while undermining the productive base that generates the denominator of the very ratio being targeted is not fiscal reform, it is fiscal cannibalism.”

On the energy sector, one of the most critical areas of the reform agenda, Business Recorder’s editorial commentary noted that the circular debt, now approaching Rs 1.9 trillion, is not merely a cash-flow management challenge but rather “the accumulated financial residue of twenty years of politically driven IPP contracting, below-cost tariffs, and deep governance failure.”

The Bigger Picture: Stability Versus Transformation

The central tension in Pakistan’s current economic trajectory is one that the Aurangzeb-IMF meeting placed on full display: the difference between macroeconomic stabilisation and genuine structural transformation. Pakistan’s foreign exchange reserves have improved, reaching $16 billion by the end of December 2025, up from $14.5 billion in June 2025, and inflation has been brought progressively under control. These are measurable gains.

Yet the structural challenges, such as a narrow tax base, a bloated public sector, energy sector inefficiencies, high external liabilities, and a persistent inability to generate export-led growth, remain largely unresolved. The government’s stated commitment to moving Pakistan away from boom-and-bust cycles is not new; the same language has featured in reform agendas under multiple administrations.

What sets the current moment apart, analysts note, is the combination of continued IMF engagement, a Finance Minister with clear private-sector credentials, and crucially $4.8 billion in cumulative programme disbursements that have restored a degree of fiscal credibility. 

Whether this translates into durable transformation will depend on the content of Budget 2026–27, the pace of SOE privatisation, and the government’s ability to broaden the tax base without further burdening an already stretched formal sector.

Conclusion

The May 13 meeting between Finance Minister Aurangzeb and the IMF mission was substantive and, by official accounts, constructive. Pakistan has made measurable progress on macroeconomic stabilisation, a point the IMF itself has acknowledged. The $1.3 billion disbursement reflects continued programme compliance and offers near-term support to foreign exchange reserves.

However, the harder work of structural transformation in taxation, energy, governance, and SOE reform remains incomplete. As Budget 2026–27 takes shape, the critical question is whether the government will use this window of relative stability to introduce genuinely bold reforms, or whether, as critics have cautioned, the budget will once again be calibrated primarily around programme targets rather than Pakistan’s long-term economic needs.

References

Clarke, N. (2026, May 8). Statement on the IMF Executive Board approval of third EFF review for Pakistan. International Monetary Fund. https://www.energyupdate.com.pk/2026/05/09/imf-approves-1-3bn-for-pakistan-warns-of-rising-risks-from-middle-east-conflict/

Dawn. (2026, May 13). Finance minister discusses budget preparations with visiting IMF mission. https://www.dawn.com/news/1999908

Dawn. (2025, June 10). ‘Short of structural, bold reforms’: Finance experts unpack 2025–26 budget. https://www.dawn.com/news/1916314

International Monetary Fund. (2026, March 11). Pakistan: End-of-mission statement on the third review of the 37-month extended arrangement under the EFF and the second review of 28-month arrangement under the RSF. https://www.imf.org/en/news/articles/2026/03/11/pr-26075-pakistan

International Monetary Fund. (2026, March 27). IMF reaches staff-level agreement on the third review for the 37-month extended arrangement under the EFF and the second review under the RSF Pakistan. https://www.imf.org/en/news/articles/2026/03/27/pr-26095-pakistan

Kundi, I. A. (2026, May 14). Finance minister briefs IMF on upcoming budget. The Nation. https://www.nation.com.pk/14-May-2026/finance-minister-briefs-imf-upcoming-budget

Petrova, I. (2026, March 27). IMF reaches staff-level deal with Pakistan for $1.2bn tranche after third EFF review. The Express Tribune. https://tribune.com.pk/story/2599737

ul Haque, N. (2026, May 8). A review of economic journalism and opinion pages, May 1–8, 2026: More information, limited inquiry. Nadeem ul Haque Substack. https://nadeemulhaque.substack.com/p/a-review-of-economic-journalism-and

Web Desk. (2026, May 13). FinMin Aurangzeb discusses upcoming budget preparations, economic reforms in meeting with IMF mission. The Express Tribune. https://tribune.com.pk/story/2607861

Web Desk. (2026, May 13). Pakistan, IMF discuss upcoming federal budget. Business Recorder. https://www.brecorder.com/news/40420959

CategoriesNews Economy Investment Property Property Laws Real Estate Real Estate Investment

KP passes property Act 2026 to protect overseas Pakistanis’ properties

PESHAWAR: The Khyber Pakhtunkhwa Assembly has passed the Overseas Pakistanis Property Act 2026 to protect properties owned by overseas Pakistanis and ensure faster resolution of related disputes.

The law, introduced by Provincial Law Minister Aftab Alam, is aimed at preventing illegal occupation, unlawful transfer, and other property-related issues faced by expatriates in the province.

Under the Act, special courts will be established across Khyber Pakhtunkhwa in consultation with the Peshawar High Court. These courts will be headed by judges of the rank of Additional District and Sessions Judge, while pending property cases involving overseas Pakistanis will also be transferred to the special courts.

The law requires such cases to be decided within 120 days, while appeals must be filed within 15 days. Overseas Pakistanis will also be able to submit applications online, making the legal process more accessible for those living abroad.

The Act further allows testimony to be recorded through video link, enabling applicants to take part in court proceedings without travelling to Pakistan. Court notices may also be served through mobile phones, email, and mosques to improve communication and reduce delays.

The legislation also includes provisions to stop illegal transfer of properties and assist in rent recovery for overseas Pakistanis. Officials said the measure is intended to strengthen legal protection, improve access to justice, and build confidence among expatriates regarding their properties in Khyber Pakhtunkhwa.

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CategoriesSpecial Report Economy Investment News

Pakistan’s Reserves Rise by $23m, Signalling Steady Financial Recovery

Pakistan’s foreign exchange reserves continued their gradual upward trend this week, with the State Bank of Pakistan (SBP), the country’s central bank, reporting a $23 million increase for the week ended April 30, 2026. While the figure itself is modest, it reflects an incremental recovery that economists and policymakers have been closely tracking as Pakistan works to stabilise its external financial position.

Foreign exchange reserves, in the simplest terms, are the dollars and other foreign currencies that a country keeps in reserve. Think of them as the national savings account held in foreign money. These reserves are used to pay for imports, repay foreign loans, stabilise the national currency, and demonstrate to the rest of the world that a country can meet its financial obligations. When they rise, it signals strength. When they fall, alarm bells ring.

The Numbers at a Glance

The State Bank of Pakistan reported a $23 million increase in its foreign exchange reserves during the week ended April 30, 2026, which reached $15.85 billion. The country’s total liquid foreign reserves stood at $21.29 billion, of which commercial banks held net reserves of $5.44 billion.

The data also showed a slight increase in commercial banks’ reserves, which grew by $170,000 to reach $5.4428 billion. Overall, Pakistan’s total foreign exchange reserves recorded a combined increase of $24.5 million, bringing the national total to $21.2935 billion.

It is important to understand the difference between these two figures. The SBP’s reserves of $15.857 billion are the government-held reserves that are directly available for managing exchange rate pressures, paying sovereign debt, and financing critical imports.

The commercial banks’ reserves are separately managed and not directly deployable by the government in the same way. Together, the two pools form Pakistan’s total liquid foreign reserves.

What This Means for the Rupee

Alongside the reserves data, the currency market provided a broadly stable reading. The rupee saw a marginal gain of Rs 0.01 against the US dollar, closing at 278.71 in the interbank market against the previous close of 278.72.

A one-paisa movement is numerically negligible. But what it signals is arguably more important than the size of the shift: the rupee is not under fresh pressure. For a currency that spent years in near free-fall, losing more than half its value against the dollar between 2021 and 2023, a period of exchange rate stability is itself a meaningful development.

Stability in the rupee directly benefits ordinary Pakistanis, as it prevents further spikes in the prices of imported goods from fuel and edible oil to medicines and electronics.

The IMF Dimension: A Critical Near-Term Catalyst

The weekly reserve figure gains considerably more weight when placed in the context of an anticipated IMF disbursement that has been the focus of Pakistan’s financial managers and market observers alike.

The IMF Executive Board was scheduled to consider Pakistan’s Staff-Level Agreement on May 8, 2026. If approved, the country was expected to receive around $1.2 billion in fresh funding under its ongoing financial support programme.

The Ministry of Finance and the State Bank of Pakistan showed unanimous optimism over economic growth and achieving fiscal and current account targets, with the development coming amid anticipated approval of disbursements worth over $1.2 billion by the IMF.

SBP Governor Jameel Ahmad, testifying before the National Assembly’s Standing Committee, stated that the current fiscal year would end with foreign exchange reserves of $17 billion. The IMF staff mission was also expected to visit Islamabad on May 15 for finalisation of the next fiscal year (2026–27) budget in consultation with the Ministry of Finance, the SBP, the FBR, and the Power and Petroleum Divisions.

Taken together, these developments paint a picture of a government actively managing its external financing calendar and, for the moment, keeping pace with its obligations.

Gold Markets: A Parallel Development

The week’s financial news was not limited to reserves. Pakistan’s domestic gold market saw a sharp upward movement, closely tracking international price gains.

In the local market, the price of gold per tola jumped Rs7,800 to settle at Rs496,762, according to rates issued by the All-Pakistan Gems and Jewellers Sarafa Association.

Similarly, the price of 10-gram gold increased by Rs6,687 to Rs425,893. Internationally, spot gold gained 1% to $4,733.59 per ounce, after touching a two-week high earlier in the trading session.

The rally was driven by geopolitical factors: improving sentiment around a potential US-Iran diplomatic agreement eased fears of prolonged instability and lowered expectations of persistently high interest rates, both of which support investor appetite for gold.

Interactive Commodities Director Adnan Agar, commenting on the market, noted that gold had shown strong intraday volatility. He stated that for the bullish trend to continue, gold would need to cross and close above $4,875, with the next target at $4,850, followed by $4,900, and eventually the psychologically important $5,000 mark. He cautioned that if the market closed below $4,700, it would enter a dangerous zone where prices could decline towards $4,500.

Expert Analyst Perspectives – Cautious Optimism from Markets

Mohammad Sohail, CEO of Topline Securities, one of Pakistan’s leading brokerage firms, attributed the broader reserve improvement trend to a combination of policy actions and improving fundamentals.

He noted that the rise in foreign exchange reserves reflects improved external account management, higher remittances, better exports, and disciplined policy actions under the IMF’s guidance. He had also projected that reserves would surpass $17 billion by June 2026, citing strong remittances and a reduction in interest payments as key drivers.

Analysts at Arif Habib Limited provided a useful benchmark for measuring the practical impact of reserve movements. Following an earlier reserve jump triggered by an IMF disbursement, they calculated that the improvement in reserves had strengthened Pakistan’s external buffer, with import cover rising from 2.41 months a week earlier to 2.62 months, based on average imports of the last three months.

The number of months a country could theoretically continue importing without any new foreign inflows is a key health metric for any economy’s reserve position. Three months is the internationally recognised minimum safe threshold.

More broadly, market analysts pointed to the investment dimension of rising reserves. Analysts noted that stronger reserves reduce perceived risk, making Pakistan a relatively more attractive destination for portfolio and direct investments.

This shift could gradually ease borrowing costs and improve access to international capital markets. However, the same analysts added that confidence remains highly sensitive to policy consistency and global economic conditions.

A Dissenting, Structural View

Not all expert commentary has been optimistic. Dr. Raania Ahsan, a PhD economist and former Executive Director General at the Board of Investment in the Prime Minister’s Office, offered a sharper and more cautionary assessment in a widely-read analysis published in The Express Tribune in April 2026.

She argued that Pakistan’s external stability is measured more in optics than in underlying strength, warning that the country’s reserves are not entirely organic, being built on a combination of IMF disbursements, bilateral deposits, and administrative controls on imports and currency movement. In other words, they reflect managed stability, not deep structural health.

She flagged the reported repayment of billions to the UAE funds that had been rolled over annually as signalling the erosion of the assumed rollover comfort, noting that the transition from rollover to repayment fundamentally alters the external financing equation.

On the role of the IMF, Dr. Ahsan drew a critical distinction: stabilisation should not be mistaken for resolution. The IMF addresses liquidity issues. Pakistan’s challenge is one of structural solvency.

She concluded that Pakistan’s current external stability is sustained not by expansion but by compression through restricted imports, managed currency markets, and tight interest rates.

These measures have bought time but have not resolved the underlying imbalance between what the country earns and what it spends in foreign exchange. Exports remain narrow and insufficient.

A separate risk scenario, cited in regional financial coverage, added a sobering stress-test dimension: analysts noted that Pakistan has very limited room to absorb a fuel price hike because of its thin foreign exchange reserves, dependence on imported energy, and reliance on IMF-backed reforms, underscoring that the reserve cushion, while growing, remains sensitive to external commodity shocks.

Conclusion

Pakistan’s $23 million weekly increase in SBP foreign exchange reserves is, in isolation, a small number. But it belongs to a consistent pattern of week-on-week improvement that reflects a country working methodically to rebuild its financial resilience. The stability of the rupee, the improving reserve trajectory, and the anticipated IMF disbursement together paint a cautiously constructive picture.

Yet, as both market analysts and independent economists make clear, the headline reserve figure tells only part of the story. The reserves are still supported by external financing rather than export-driven organic growth, and the gap between managed stability and durable resilience remains real. The question Pakistan’s economy must ultimately answer, as Dr. Ahsan pointedly framed it, is not whether it can meet its next obligation, but whether it can build a system that stops depending on constantly preparing for the next one.

Citations

  1. Hanif, U. (2026, May 8). Foreign reserves rise by $23m. The Express Tribune. https://tribune.com.pk/story/2606902/foreign-reserves-rise-by-23m
  2. Pakistan’s foreign exchange reserves rise by $23 million in a week. (2026, May 7). Dunya News. https://dunyanews.tv/en/Business/950262-pakistans-foreign-exchange-reserves-rise-by-23-million-in-a-week
  3. Kiani, K. (2026, May 7). Finance ministry, SBP show optimism over economic growth amid expected $1.2bn tranche from IMF. Dawn. https://www.dawn.com/news/1998450
  4. SBP Reserves Increase By $730 Million Just Weeks Ahead of Next IMF Meeting. (2026, April 30). ProPakistani. https://propakistani.pk/2026/04/30/sbp-reserves-increase-by-730-million-just-weeks-ahead-of-next-imf-meeting/
  5. Pakistan’s Forex Reserves Rise by $730 Million Ahead of IMF Board Review. (2026, April 30). Bloom Pakistan. https://bloompakistan.com/pakistans-forex-reserves-rise-ahead-of-imf-review/
  6. Pakistan foreign exchange reserves jump sharply. (2026, April 30). Times of Islamabad. https://timesofislamabad.com/30-04-2026/pakistan-foreign-exchange-reserves-jump-sharply/
  7. Ahsan, R. (2026, April 20). Between reserves and reality: external sector under pressure. The Express Tribune. https://tribune.com.pk/story/2603647/between-reserves-and-reality-external-sector-under-pressure
  8. Pakistan’s foreign reserves reach $21.09b, boosted by IMF inflows. (2025, December 19). The Express Tribune. https://tribune.com.pk/story/2582945/import-cover-improves-to-262-months
  9. Pakistan exceeds IMF target as SBP reserves reach $14.5 billion. (2025, July 3). Geo.tv. https://www.geo.tv/latest/612144-pakistan-exceeds-imfs-target-with-sbps-reserves-reaching-145bn
  10. Pakistan reserves could plunge to $1.6 billion by 2028 over fuel shock: Report. (2026). ProKerala / South China Morning Post report. https://www.prokerala.com/news/articles/a1757934.html
Solar Project Set to Turn Keenjhar Lake
CategoriesNews Developments Economy Investment Power/Energy Urban Developments & Planning

$243 Million Solar Project Set to Turn Keenjhar Lake Into a Power Plant

KARACHI: The Pakistani government has announced plans to develop a 500-megawatt floating solar power project at Keenjhar Lake in Sindh, marking a significant milestone in the country’s transition to clean, renewable energy. The project, estimated to cost $243.63 million, is projected to generate approximately 861.91 gigawatt-hours of electricity annually, operating at a capacity factor of 19.6%.

The electricity generated by the facility will be supplied to K-Electric under a long-term power purchase agreement. A letter of intent has already been secured from K-Electric, and the process to select Engineering, Procurement and Construction contractors through competitive bidding is currently underway. The Sindh Transmission and Dispatch Company has also signed a memorandum of understanding with GO Energy Private Limited to facilitate power transmission from the project site.

Situated 137 kilometres from Karachi on the surface of Keenjhar Lake, one of Sindh’s largest freshwater bodies, the project will utilise approximately 1,606 acres of the lake’s surface to accommodate nearly one million solar panels. The floating design offers dual advantages: it eliminates land acquisition challenges associated with conventional solar installations and leverages the natural cooling effect of water to improve panel efficiency and overall energy output.

The initiative aligns with Pakistan’s 2030 emissions reduction targets and is part of a broader national push to diversify energy sources and reduce dependence on costly imported fossil fuels. Construction is expected to commence in 2026, with commercial operations projected to begin by 2028. The project is also anticipated to generate significant employment during both the construction and operational phases.

However, the project has drawn concern from local fishing communities and environmentalists. As Keenjhar Lake falls within a designated Ramsar wetland site, experts have flagged potential risks to migratory bird habitats and local fisheries, underscoring the need for thorough environmental oversight throughout the project’s development.

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FBR Gets Formal Mandate to Levy
CategoriesNews Economy Tax

FBR Gets Formal Mandate to Collect PDL and Climate Support Levy

ISLAMABAD: The federal government has officially authorised the Federal Board of Revenue (FBR) to collect the Petroleum Development Levy (PDL) and Climate Support Levy (CSL) on petroleum products across Pakistan. The move formally designates the tax authority as a collection agent of the Ministry of Petroleum and Petroleum Division, marking a significant shift in the administrative handling of energy-related levies.

The development follows the issuance of SRO 800(I)/2026 by the FBR, which introduces key amendments to the Sales Tax Rules 2006. The notification establishes a revised collection mechanism under which the FBR will operate on behalf of the relevant ministries, streamlining the levy collection process within the existing legal framework.

A central feature of the new framework is the introduction of a Domestic Sales Invoice (DSI) system, designed to standardise reporting and strengthen compliance throughout the petroleum supply chain. Under this arrangement, all registered purchasers of petroleum products, including petrol pump operators, are now required to submit comprehensive transaction data in a prescribed format.

The mandatory disclosures include buyer details such as National Tax Numbers (NTN) and Computerised National Identity Card (CNIC) numbers, alongside HS codes, transaction dates, quantity sold in litres, total sales value, and separately itemised PDL and CSL amounts. Where exemptions or zero-rated supplies apply, relevant statutory references must also be provided.

The amendments specifically update Annexure-L of the monthly sales tax return form STR-7. Officials noted that the Climate Support Levy, introduced in the Finance Bill 2025 and effective since July 1, 2025, is intended to fund measures to address environmental and climate-related challenges.

Importantly, FBR officials clarified that no changes have been made to existing tax rates or the overall levy structure. The revision is purely administrative, aimed at improving documentation, transparency, and reporting standards across the petroleum sector.

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CategoriesNews Economy Investment Property Property Taxes Real Estate Investment

Punjab Property Valuation Reforms Target UAE and Gulf Investors

LAHORE: Punjab has started revising property valuation rates across several districts to encourage investment from the United Arab Emirates and other Gulf countries.

The revision was initiated after directions from the Board of Revenue Punjab. District administrations are reviewing local property rates and aligning them with Federal Board of Revenue benchmarks for the upcoming fiscal year. The step aims to reduce tax-related hurdles in the real estate sector and make property transactions more practical for investors.

Officials believe that clearer and more balanced property valuation rules can improve investor confidence, particularly among UAE and Gulf-based investors interested in Pakistan’s real estate market.

The process is currently being carried out at the district level and is expected to affect property transactions in major urban centers. Real estate stakeholders have mixed views about the likely impact. Some expect the revised tax structure to increase buying and selling activity, while others believe the immediate benefits may mainly support large housing societies and major developers.

The changes are being prepared before the start of the new fiscal year. The revised valuation framework is expected to influence property taxes, transaction costs, and investment decisions across Punjab’s real estate sector.

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CategoriesNews Economy Investment

Gold Slips Sharply, Per Tola Price Down by Rs8,900

KARACHI: Gold prices fell sharply by Rs. 8,900 in Pakistan on Tuesday, following a major decline in the international market.

According to the All-Pakistan Gems and Jewellers Sarafa Association, the price of gold per tola dropped by Rs8,900 and reached Rs485,062. The price of 10 grams of gold also went down by Rs7,630 to Rs415,862. In the international market, gold prices decreased by $89 per ounce and settled at $4,627.

Silver prices also recorded a decline. The international price of silver fell by $2.38 per ounce to $73.27. In Pakistan, silver dropped by Rs238 per tola to Rs7,811, while the price of 10 grams of silver fell by Rs204 to Rs6,696.

The decline came after recent ups and downs in the bullion market. A day earlier, gold prices in Pakistan had increased by Rs800 per tola to Rs493,962, while the price of 10 grams had risen by Rs686 to Rs423,492.

Market experts said gold prices are being affected by changes in global markets, uncertainty in the world economy and tensions between the United States and Iran. Investors often move towards gold during uncertain times, but prices can also fall quickly when market conditions change.

The latest decline shows that gold prices remain highly unstable, both locally and internationally. Traders and buyers are expected to closely follow global market trends before making major buying or selling decisions.

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