The match ahead

IT was probably the type of victory that was required — a throwback to the old style that had become the hallmark of the Pakistan cricket team. The Asia Cup has seen Pakistan win and lose matches in all manner possible but this was a first. Salman Ali Agha’s men appeared to be out of the contest in the first quarter of the Super Four clash against Bangladesh — which had turned into a virtual semi-final after earlier results — but then found a way to build towards a crescendo that delivered a thrilling finish, taking them to a title clash against arch-rivals India on Sunday. In the 40-year history of the Cup, it is the first time that the bitter neighbours — their animosity accelerating after May’s skirmishes — will clash in the showpiece match. Sunday’s final, however, will be the third time the two sides face off at the tournament, India having won both earlier games. The rivals did not shake hands then, indulging in nationalist sentiments instead. Regardless of whether the tension continues in Sunday’s match, after scraping past Bangladesh, Mike Hesson’s charges need to play the perfect game against India.

The definition of perfection, though, is subjective when it comes to the national side. Pakistan’s top order has hardly delivered consistently in the tournament. The only game in which the top three batters delivered was against India in the Super Fours, with Pakistan bungling spectacularly towards the end. Mr Hesson’s blueprint of high-tempo batting has come under scrutiny but as Pakistan showed in their last two matches against Sri Lanka and Bangladesh, it is in their DNA to rediscover their mojo when things seem to be derailing. Pakistan do not control games; they pluck out wins when it seems impossible. The odds may be stacked heavily in India’s favour but Pakistan might have found their lost soul. Mr Hesson should channel that for now, leaving the implementation of his philosophy for later.

Published in Dawn, September 27th, 2025

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Liquidity strain

THE State Bank’s reported step to slow down its dollar purchases from the interbank market aims at refuelling liquidity to defend the rupee against the pressure on the exchange rate by the trade deficit that is widening on account of surging imports and stagnating exports. Apparently, the bank is trying to strike a balance by prioritising a liquid currency market for exchange rate stability after mopping up nearly $8bn last year. A troubling side effect of the dollar scarcity is already visible: the re-emergence of a grey market for foreign currency — the only place to buy dollars for the past several months, though at a large premium. Currency dealers have long been complaining of a liquidity crunch, as demand outstrips supply and many transactions slip outside formal channels. This creates a dual exchange rate environment that undermines transparency and trust in the system, besides triggering speculation.

The effort to keep the exchange rate stable could, however, prove fragile if the current account runs another monthly shortfall in September, pushing the entire first quarter of FY26 into the red — a worrying reversal after last year’s surplus. Such concerns are grounded in resurgent imports amid the easing of curbs on the opening of letters of credit — long a pressure point for industry — and increasing demand. Imports have risen by over 14pc in July-August. The stagnating exports meant that the trade deficit would spike to $6bn in the same period. With floods having devastated farmlands across Punjab — Pakistan’s largest agricultural producer — swelling food imports have re-emerged as a fault line. The sharp 37pc hike in the food import bill highlights both structural weaknesses in agriculture and the risk of prolonged pressure on the external account. Yet, some analysts argue that the picture is not entirely bleak. Remittances, a major source of liquidity anchoring exchange rate stability, remain steady at around $3bn a month, boosted partly by aid-linked inflows. At the same time, diplomacy has brought some comfort. The new defence pact with Saudi Arabia, renewed goodwill with Beijing, and the promise of the Panda bond and loan rollovers by it, will likely ensure currency stability for some time. But without tackling structural imbalances involving import-heavy consumption and stagnant exports, it will be tough for the central bank to keep the surging dollar demand from eventually weighing on the rupee unless inflows are strengthened further.

Published in Dawn, September 27th, 2025

Oval Office meeting

COMPARED to the coldness of the Biden administration towards Pakistan, bilateral relations under Donald Trump’s watch have warmed up considerably.

Early on Friday, the prime minister and the army chief met the American leader in the White House to mainly discuss, as a PM House readout describes, security, counterterrorism and investment issues. Mr Trump had earlier in the week met Shehbaz Sharif in New York, during a meeting with leaders of Muslim states on the sidelines of the UNGA to discuss the Gaza war. In June, the army chief had an unprecedented lunch with the American president. This is the first time a Pakistani prime minister has had a dedicated bilateral interaction with a US president in six years; the last interaction was between Imran Khan and Mr Trump in 2019.

Apart from the photos of beaming leaders and mutual appreciation — Mr Trump referred to Mr Sharif as a “great leader”, while the PM called the US leader “courageous” — the details of what was discussed are sketchy. As per the Pakistani side, tensions in the Middle East and South Asia, along with investment opportunities in Pakistan, were mentioned. The PM lauded Mr Trump’s efforts to end the war in Gaza, calling him a “man of peace”.

The US leader may be many things, but a peacemaker he is not, having attacked Iran in June, while if he really wanted to end the Gaza genocide, he could halt all American weapons and funds transfers to the Israeli regime. It is, therefore, hoped that behind closed doors, Mr Sharif convinced the president of the need to immediately end the Gaza slaughter, as well as finding a just solution to the Kashmir dispute.

Should this be seen as a great reset in Pakistan-US ties, or simply a temporary phase of positivity? Historically, the relationship has been a transactional one, with the US supporting Pakistan and providing it arms and aid at key junctures — the Cold War, the Afghan Jihad, the ‘war on terror’ — only to turn ambivalent, or even hostile, once its geopolitical aims were achieved.

The Biden era was a clear example of American indifference towards Pakistan. Moreover, the incumbent US president is known to change positions overnight, so to formulate future policy on the basis of a few interactions would be unwise. Besides, the foreign policy priorities of Islamabad and Washington diverge considerably in several areas, including the Palestine question, ties with Iran and the relationship with China.

Can Pakistan balance relations with the US while maintaining its principled stand on these issues, particularly its ties with China? The lesson of history is that while better ties with the US should be pursued, Pakistan should be prepared for abrupt changes in American policy.

Published in Dawn, September 27th, 2025