Fed tightening may pressure PKR but rising oil remains bigger risk for Pakistan, warn experts

Market experts told Business Recorder that the US Federal Reserve's quarter-point rise is unlikely to hit Pakistan hard, though it may weigh on the rupee. The Fed lifted its benchmark rate by 25 basis points to 3.75% to 4.00%, its first move under chair Kevin Warsh. Updated projections show 16 of 18 policymakers expecting at least one more increase by year-end.

Waqas Ghani of JS Global said Pakistan's near-term financing is relatively shielded because a $3 billion Eurobond sold in September is already secured. Saad Hanif of Ismail Iqbal Securities said the hike alone would not seriously jolt Pakistan, citing record SBP reserves of $21.4 billion. He added that monetary policy is the more important channel, since 11.1% year-on-year inflation in August keeps the real policy rate near 0.4%.

Saad Khan, a senior vice president at a global consulting firm, warned the hike could intensify rupee pressure and raise dollar debt costs. He said Pakistan still faces roughly $21.5 billion of foreign repayments in FY2027, with the economy leaning on loans, imports and remittances. Hanif also named crude near $100 per barrel, above SBP's July assumption of $80, as the greater risk. Sana Tawfik of Arif Habib Limited described the move as minor, with no major impact.