Shares at the Pakistan Stock Exchange (PSX) plunged during intraday trading on Friday as a staff-level agreement with the International Monetary Fund (IMF) for the completion of the ninth review of a $7 billion loan programme was delayed.

The benchmark KSE-100 index lost 743.04 points, or 1.75 per cent, to reach 41,723.55 points at 3:41pm.

Topline Securities CEO Mohammad Sohail said the market was under pressure because of the delay. “If the delay is extended, the downward trend may continue,” he added.

“The KSE-100 has pared some of this month’s gains in early morning trading due to the delay in securing the staff-level agreement with the IMF,” Intermarket Securities’ Head of Equity Raza Jafri commented.

An IMF delegation, which left Pakistan last night after holding talks with the government for 10 days, issued a statement early today that virtual talks would continue.

In a press conference shortly afterwards, Finance Minister Ishaq Dar said that the government had received the Memorandum of Economic and Financial Policies (MEFP) from the IMF, indicating that a staff-level agreement with the lender was still pending.

“I am confirming that the MEFP draft has been received by us at 9am today,” he said. “We will completely go through the [MEFP] over the weekend and will hold a virtual meeting with [Fund officials]. It will obviously take a few days.”

The MEFP is a key document that describes all the conditions, steps and policy measures on the basis of which the two sides declare the staff-level agreement.

Once the draft MEFP has been shared, the two sides discuss the policy measures outlined in the document. Once these are finalised, a staff-level agreement is signed, which is then forwarded to the Fund’s Executive Board for approval.

Pakistan’s foreign exchange reserves fell to $2.916bn during the week ending on Feb 3. Experts believe that the country’s reserves are enough for only 16 or 17 days of imports.

In such a situation, the country urgently needs to complete the ninth review to unlock the disbursement of $1.2bn from the IMF and inflows from friendly countries and other multilateral lenders.