Karachi: The KSE-100 index surged to a record high, closing at 189,166 points, a 2.2% increase week-over-week. This remarkable performance was accompanied by a 16% rise in average daily turnover. Concurrently, a significant drop in T-bill yields marked the first reversion to single digits in four years, signaling potential policy rate easing as the government secured Rs726 billion against a target of Rs700 billion.

According to JS Global, the International Monetary Fund (IMF) has adjusted Pakistan's growth forecast for fiscal year 2026, lowering it to 3.2% from the previously projected 3.6%. The country's current account balance also shifted from a surplus of $98 million in November 2025 to a deficit of $244 million in December 2025, attributed to a 17% year-on-year increase in imports and an 11% decline in exports. Over the first half of fiscal year 2026, the current account deficit totaled $1.2 billion, while foreign direct investment fell by 43% to $808 million compared to the same period last year.

In response to these economic shifts, the government is reportedly negotiating a $36 billion loan with international financial institutions and Saudi Arabia. This loan, expected to carry a financing rate of 1-2%, is aimed at refinancing power sector debt to lower electricity tariffs, particularly benefiting industrial sectors. Meanwhile, the State Bank of Pakistan's reserves saw a modest increase of $16 million, maintaining stability at $16 billion week-over-week.