Good afternoon,

Today’s news: Globally, the Middle East, and Russia. Locally, SBP keeps policy rate unchanged at 11%, Pakistan floats a new sugar tender, security forces kill 31 TTP militants, and fresh rains threaten flood-hit regions.

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Around The World

Updates from the Middle East. The Israeli military struck multiple buildings in Gaza on Sunday, after warning people to leave several neighborhoods. Israel’s assault on Gaza appeared to be accelerating, as the US Secretary of State Marco Rubio visited Israel to discuss the war in Gaza following Israel's attack on Hamas members in Qatar.

Meanwhile, Israeli troops carried out a ground operation in Syria’s southeastern Deraa province, the latest incursion in the neighbouring country, as it also continues air raids against Damascus in various locations. Israel and Syria have held direct talks in recent months, which were aimed at reaching a possible security deal.

Gather ye round. An emergency meeting of Arab and Islamic states is taking place in Qatar in response to Israel's air strike on Hamas leaders in Doha last week. A draft resolution condemns Israel's "hostile acts, including genocide, ethnic cleansing, [and] starvation." Israel has strongly denied the allegations. Earlier, Qatari Prime Minister Mohammed bin Abdulrahman bin Jassim al-Thani urged the international community to stop applying double standards and to punish Israel, while Arab and Islamic states condemned Israel’s “barbaric” attack on Qatar.

Personal space. Romania has condemned Moscow’s irresponsible actions after a Russian drone breached Romanian airspace during an attack on neighboring Ukraine, prompting Bucharest to scramble fighter jets. The drone was intercepted by two F-16 fighter jets, which were carrying out an air patrol mission in northern Dobruja and came close to downing it. The incident comes days after Poland shot down Russian drones that had violated its airspace earlier this week, prompting NATO allies to pledge to beef up defenses on the alliance’s eastern flank.

Pakistan

Hold up. The State Bank of Pakistan’s Monetary Policy Committee kept the policy rate unchanged at 11%, in line with market expectations, citing inflationary risks from recent floods despite room for easing given lower inflation and external stability. Analysts had widely anticipated the decision, warning that flood-related crop losses could drive food inflation, strain supply chains, and re-emerge external pressures through higher imports. 

Since the last meeting, the rupee has appreciated by 0.5%, petrol prices have decreased by 3%, and global oil prices have fallen by nearly 10% to $63 per barrel. Inflation eased to 3% YoY in August from 4.1% in July, while the current account posted a $254m deficit in July after a June surplus. SBP reserves rose to $14.34bn as of Sept 5, taking total liquid reserves to $19.68bn.

Sweet deals. Pakistan’s Trading Corporation issued a new international tender to buy 100,000 metric tons of white refined sugar, with offers due by September 23, after reportedly purchasing a similar quantity last week at around $560 per ton from trading house Bare. The move is part of the government’s plan to import 500,000 tons to curb soaring domestic sugar prices, with about 235,000 tons already procured through tenders held since July. 

Takedown. Pakistan’s security forces killed 31 militants linked to the banned Tehreek-i-Taliban in two intelligence-based operations in Khyber Pakhtunkhwa’s Lakki Marwat and Bannu districts. Fourteen terrorists were killed in Lakki Marwat and 17 in Bannu, with follow-up sanitization operations underway. The ISPR accused India of sponsoring terrorism in Pakistan and reiterated the military’s resolve to eliminate it. The operations follow earlier clashes from September 10-13, in which 45 militants and 19 soldiers were killed. 

Storms surge. The PMD has forecast heavy rain and thunderstorms across upper regions from Sept 15 to 19, warning of flash floods and landslides, while Sindh braces for Indus flows with Guddu Barrage already crossing 627,000 cusecs. Evacuations are underway, with over 163,000 people and nearly 439,000 cattle shifted to safety in Sindh.  Flooding has devastated Punjab, submerging hundreds of villages along the Sutlej and Ravi, displacing 4.57 million people across 4,700 villages, as officials expect the situation to ease as river levels recede.

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