Karachi: The KSE-100 index experienced a decline as renewed tensions between the United States and Iran impacted investor confidence, closing the week at 175,328 points, a 1.3% decrease from the previous week. Brent crude prices increased by 6% to approximately $94.47 per barrel during the same period. On the domestic front, fuel prices continued to rise, with petrol increasing by Rs6.4 per liter and high-speed diesel by Rs7 per liter.

According to JS Global, August 2026 saw an inflation rate of 11.1% in Pakistan, coinciding with a 10% year-on-year widening of the trade deficit, primarily due to a 7% increase in imports. The cumulative trade deficit for the first two months of the fiscal year 2027 grew by 18% year-on-year to $7.1 billion. The Federal Board of Revenue missed its August 2026 collection target by Rs29 billion, collecting Rs901 billion, yet exceeded the cumulative target for the fiscal year by Rs12 billion.

In financial developments, Pakistan successfully raised a record $3 billion through a Eurobond issuance, with interest rates between 7.5% and 7.9%. This follows the early retirement of a record Rs1.2 trillion in debt to the State Bank of Pakistan. Additionally, the government raised Rs680 billion in the latest Treasury bill auction, with yields decreasing by 5-8 basis points across most tenors except for the 6-month T-bill. Meanwhile, the State Bank of Pakistan's reserves remained stable at $17.1 billion.