Pakistan secured a badly-needed $3 billion short-term financial package — subject to approval by the IMF board in mid-July…reports Asian Lite News
Pakistan Stock Exchange (PSX) Monday witnessed a bullish trend as the KSE-100 benchmark index crossed over 2,400 points after the government reached a consensus with the International Monetary Fund (IMF) on a bailout package, media reports said.
The index opened in the green zone and remained positive throughout the session before the trading was halted for an hour after the index hit its upper circuit limit of 5 per cent at around 9:30 a.m., Geo News reported. The trading resumed at 10:37 p.m.
When the market opened on Monday, after Eid holidays break, it surged a record 2,231.1 points to 43,683.78 points, rising more than 5 per cent, which forced the suspension, Geo News reported.
As the trading resumed after an hour’s suspension, the benchmark index surged to 43,923.71 points — an increase of 5.96 per cent or 2471.03 points — at 11:20 a.m.
At the close of the trading, the market had gained 2446.32 points — an increase of 5.9 per cent — and closed at 43,899 points.
Pakistan secured a badly-needed $3 billion short-term financial package — subject to approval by the IMF board in mid-July — on Friday, giving the South Asian economy a much-awaited respite as it teeters on the brink of default, Geo News reported.
Ecohing Tariq, Arif Habib Limited’s Head of Research Tahir Abbas also said that the rally is primarily due to the staff-level agreement with the IMF.
When asked whether the rally would be short-lived, Abbas said: “No, the momentum and sentiment are very positive given now the country has an economic roadmap ahead for the next nine months.”
The KSE-100 index had become the world’s cheapest equity benchmark, according to Bloomberg, as concerns regarding political turmoil and a risk of default had sent investors fleeing, Geo News reported.
Pakistani Prime Minister Shehbaz Sharif has said that his government’s stand-by agreement with the IMF for $3 billion will help in bringing economic stability and growth to the country.
Sharif said the agreement with the IMF was inevitable for the country and that his government is committed to completing this programme while making efforts to achieve self-sufficiency in the future.
He added that his government is leading dedicated efforts by all the state institutions to execute an economic revival plan to stabilise the economy by enhancing investment in agriculture, mining and information technology, and by increasing exports.
On the occasion, the country’s Finance Minister Ishaq Dar said Pakistan will receive $1 billion soon after the approval by the IMF executive board in mid-July
US role in deal
The United States played a key behind-the-scenes role to help Pakistan secure a $3 billion bailout package with the International Monetary Fund (IMF), media reported.
“The United States supported Pakistan throughout the process but also insisted that they implemented the reforms they agreed with the IMF,” a diplomatic source said, Dawn reported.
According to these sources, Foreign Minister Bilawal Bhutto-Zardari had at least two telephonic conversations with Secretary Antony Blinken over this issue. The matter was also discussed in face-to-face meetings between the two leaders.
The Pakistan embassy in Washington maintained regular contacts with officials at the US Treasury and State Department. At the Treasury, they worked with Deputy Under Secretary Brent Nieman, who oversees international financial matters.
The embassy also sought the support of key US lawmakers, including Senator Lindsey Graham who met a Pakistani team days before the deal.
