Karachi: The KSE-100 index recorded a 3% increase over the past week, attributed to positive developments in Iran-Oman talks concerning the Strait of Hormuz. This progress has alleviated some geopolitical tensions, despite ongoing U.S. sanctions against Iran. The easing tensions led to a 9% decrease in Brent crude prices, down to $82.1 per barrel, and subsequently resulted in lower local petrol and diesel prices.

According to JS Global, the inflation rate in Pakistan decreased to 9.2% in July 2026, marking the first time in four months that it has fallen to a single-digit figure. However, the country continues to face external economic pressures. The trade deficit expanded by 25% year-on-year to $3.95 billion, driven by an 18% increase in imports compared to a 10% rise in exports. On a monthly basis, the deficit saw a 15% reduction. In an effort to bolster foreign exchange reserves, Pakistan has formally requested China to expedite the refinancing of $1.3 billion in commercial loans.

In fiscal developments, the Federal Board of Revenue (FBR) collected Rs816 billion in July 2026, surpassing its monthly target by Rs36 billion. Additionally, the government raised substantial amounts through debt auctions, with Rs789 billion obtained from Treasury bills and Rs882 billion from Pakistan Investment Bonds (PIBs). The yields on PIBs increased by 16 to 26 basis points across different tenors, while T-bill yields remained stable. The State Bank of Pakistan's foreign exchange reserves saw a slight increase of $13 million, reaching $17 billion.