New banknote designs sent to cabinet for approval

KARACHI: State Bank of Pakistan Governor Jameel Ahmad said on Friday that designs for new currency notes have been finalised and sent to the federal cabinet for approval.

He shared the update while answering a question about the delay in launching the new banknotes during a meeting with members of the Karachi Chamber of Commerce and Industry (KCCI).

In January 2024, the central bank had invited the public to submit designs for new currency notes as part of a process to replace the existing series. The SBP had said at the time that the new notes would carry advanced security features and help address the problem of counterfeit currency. It had also described the issuance of new banknotes every 15 to 20 years as an established practice for security reasons.

Exchange rate, virtual assets and inflation

During the KCCI meeting, Ahmad said exchange company rates are entirely driven by market forces and that the State Bank does not directly set exchange rates.

He also said work was in progress on the licensing and regulatory framework for virtual assets in Pakistan.

On inflation, the SBP governor cautioned that there could be temporary pressure in the coming period and said inflation may rise above seven per cent in the last quarter of FY26. He said, however, that the central bank remained committed to keeping inflation within the medium-term target range of 5-7pc.

External account and remittances

According to a KCCI press release, Ahmad said Pakistan’s current account stayed in surplus during the first nine months of FY26, while the overall deficit was expected to remain between zero and one per cent. He said the external account was now in a much stronger and healthier position.

He added that global uncertainty and fluctuations in oil prices could affect growth in the final quarter of FY26.

Ahmad said SBP reforms, along with strict action against hundi and hawala, had contributed significantly to economic stabilisation and the strengthening of foreign exchange reserves.

He said remittances, which were $38bn in the last fiscal year, were projected to cross a record $41bn in the current fiscal year.

Suspicious transactions and SME financing

Responding to a question about the alleged Pinky Cocaine Queen case and whether the banking system has the capacity to identify suspicious financial activity, the SBP governor said banks and financial institutions are required to monitor suspicious transactions under strict regulatory frameworks.

He said any unusual or suspicious activity detected through the banking system is referred to the relevant law enforcement and investigating agencies for further action in accordance with the law.

On the central bank’s renewed emphasis on small and medium enterprises, Ahmad said regulations had been simplified, procedural barriers reduced and banks instructed to prepare dedicated SME growth plans.

He said SME financing had increased from Rs491bn in June 2024 to Rs882bn by December 2025, with a target of Rs1.5 trillion by June 2028.

Exports and business community concerns

Ahmad said export performance had been affected by global economic conditions and lower commodity prices. He said exports were estimated at around $30bn this year, compared to $32bn last year. He added that the government was working on measures to reverse the decline and that positive results were expected within the next two months.

At the meeting, Businessmen Group Chairman Zubair Motiwala, referring to the prevailing geopolitical situation, urged overseas Pakistanis to continue supporting the national economy during the ongoing Middle East conflict and help reduce pressure on the external account in the current fiscal year.

KCCI President Rehan Hanif said valuation issues were causing serious problems for the business community, as commercial banks, rather than Customs authorities, were in many cases effectively setting valuation benchmarks. He urged the SBP to withdraw valuation-related powers from commercial banks to make trade operations smoother.