Karachi: The KSE-100 Index experienced a significant decline this week, dropping 4.5%, equivalent to 7,678 points, as ongoing geopolitical tensions affected investor confidence. This downturn coincided with a surge in international oil prices, with Brent crude reaching a four-year high of $126 per barrel, driven by disruptions in the Strait of Hormuz. The Monetary Policy Committee responded by increasing the policy rate by 100 basis points to 11.50%, effective April 28, 2026, to address rising inflation from external supply shocks.

According to JS Global, the International Monetary Fund's Executive Board is set to assess Pakistan's third tranche under the Extended Fund Facility and the second review under the Resilience and Sustainability Facility on May 8. The government anticipates the approval of a $1.2 billion disbursement, having met most IMF conditions. Concurrently, the power sector's circular debt rose by Rs224 billion in the first eight months of FY26 to Rs1.84 trillion.

In recent financial developments, the government secured Rs1.37 trillion in a T-bill auction, surpassing the Rs650 billion target, with yields rising by 21-83 basis points across tenors. Meanwhile, the State Bank of Pakistan rejected all bids in the PIB auction, citing elevated yield expectations.