Losses at Pakistan stock market amid jitters over interest rate hike

Stockbrokers monitor the share prices during a trading session at the Pakistan Stock Exchange (PSX) in Karachi, Pakistan, on June 3, 2022. (AFP/File)
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Updated 28 November 2022
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Losses at Pakistan stock market amid jitters over interest rate hike

  • Central bank on Friday raised interest rate by 1% citing inflationary pressure 
  • Pakistan’s inflation rate was recorded at 26.6% in the month of October

KARACHI: Pakistan's stock market shed more than 865 points during the trade on Monday, amid jitters from a hike in the interest rate. 

Pakistan’s central bank decided on Friday to jack up key policy rate by 100 basis points to 16 percent, citing inflationary pressure on the economy which it said had not toned down yet. 

But the hike sent jitters through the Pakistan Stock Exchange since it opened Monday morning. 

“The market has reacted to the unexpected rise in the policy rate by 1 percent,” Ahsan Mehanti, CEO of the Karachi-based Arif Habib Corporation holding company, told Arab News. 

“The appointment of the new army chief and end of long march eased off pressure at equity market, otherwise the reaction would have been much severe.” 

The benchmark KSE100 index, which lost 650 points Monday morning, shed another 300 points by the afternoon. The index was at 41,972 points by the time this report was filed. 

On Friday, the central bank said the decision to raise interest rate was made to ensure that elevated inflation could not get entrenched and begin to risk financial stability, hoping for higher growth on a more sustainable basis. 

It said the higher inflation was driven by persistent global and domestic supply shocks that were also raising costs, amid the ongoing economic slowdown. 

Pakistan’s inflation rate has hovered around historic highs in recent months and was recorded at 26.6 percent in October. 

The central bank now expects the average inflation to go up to 21-23 percent during the current fiscal year (FY23), owing to higher food prices and core inflation. 

Pakistan has also witnessed an economic slowdown in the wake of the recent floods that have damaged huge infrastructure and agriculture output. 


Pakistan says it seized 32 square kilometers inside Afghanistan as border clashes escalate

Updated 28 February 2026
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Pakistan says it seized 32 square kilometers inside Afghanistan as border clashes escalate

  • Security official describes ‘limited tactical action’ in Gudwana after Afghan assaults
  • Islamabad accuses Kabul of sheltering militants as UN, China and Russia urge restraint

ISLAMABAD: Pakistan has seized a 32-square-kilometer area inside Afghanistan following overnight fighting, a security official said on Saturday, as cross-border clashes between the two countries escalated sharply.

A Pakistani security official, speaking on condition of anonymity, said troops carried out a “limited tactical action” in the Gudwana area opposite the Zhob sector along the frontier, capturing Afghan territory after responding to attacks on Pakistani positions.

“On the night of Feb. 26/27, posts opposite the Zhob sector launched anticipated physical attacks on multiple Pakistani positions,” the official said, referring to fighters linked to Afghanistan’s Taliban authorities, whom Islamabad identifies as Tehreek-e-Taliban Afghanistan (TTA).

“In response to aggressive unprovoked fire and physical attacks, Pakistan security forces launched a limited tactical action on the night of Feb. 27/28 in the general area of Gudwana with a view to capture TTA Tahir Post,” he continued, adding that 32 square kilometers of Afghan territory were seized.

The official said special combat teams crossed the border after preparatory bombardment, supported by intelligence, surveillance and reconnaissance assets providing “real-time battlefield awareness.”

He said 24 Afghan Taliban fighters were killed and 37 wounded, with no Pakistani casualties reported.

The claims could not be independently verified, and there was no immediate confirmation from Taliban authorities in Kabul of any territorial loss in the Gudwana area.

The latest clashes erupted after Pakistani airstrikes targeted what Islamabad described as militant hideouts inside Afghanistan over the weekend, triggering retaliatory fire along the frontier and sharply escalating long-running tensions. Islamabad accuses Kabul of sheltering Pakistani Taliban militants responsible for attacks inside Pakistan, an allegation that Afghanistan denies.

Pakistan’s Information Minister Attaullah Tarar said on Saturday evening that 352 Afghan Taliban fighters had been killed and more than 535 wounded since the latest phase of hostilities began.

Tarar said Pakistani strikes had destroyed 130 check posts, 171 tanks and armored vehicles and targeted 41 locations across Afghanistan by air. Those figures could not be independently verified.

The United Nations, as well as China and Russia, have called for restraint.

The United States said Pakistan has the right to defend itself against cross-border militancy.