PSX, rupee surge after IMF review success

Published November 16, 2023
—PSX website.
—PSX website.

The Pakistan Stock Exchange’s (PSX) benchmark index and rupee recorded gains on Thursday, a day after the government and the International Monetary Fund (IMF) reached a staff-level agreement paved the way for Pakistan to receive $700 as part of the the Stand-by Agreement.

According to the PSX website, the KSE-100 index closed at 57,397.02 points, up 716.96 or 1.26 per cent from the previous close of 56,680.

Tresmark Finance said the index reached an “all-time high” today after crossing the 57,000 milestone.

Meanwhile, the PKR gained 76 paise or 0.26pc against the dollar in the interbank market after the recording consecutive losses in 17 sessions. The State Bank of Pakistan said the rupee closed at Rs287.38.

The IMF funds to be issued are a second tranche of the nine-month bailout package and are subject to approval from the IMF’s executive board, the lender said in a statement yesterday. This will bring total disbursements under the $3bn package, approved in July, to almost $1.9bn.

The IMF had called upon the authorities to restore full return to the market-determined exchange rate and highlighted risks that may arise because of geopolitical tensions, rise in commodity prices and difficult global financial conditions, and advised the authorities to continue efforts to build resilience.

It had also pointed out that the timely disbursement of committed external support remains critical to support the authorities’ policy and reform efforts as the government was accelerating engagement with multilateral and official bilateral partners.

Today’s optimism followed a flat day at the market, as stocks saw consolidation over the decision by MSCI — a provider of global indices for passive investments — to reduce the weight of Pakistani shares in its frontier market’s benchmark a day ago.

Speaking to Dawn.com today, Zafar Paracha, General Secretary Exchange Companies Association of Pakistan (ECAP), said today proved to be positive day for Pakistan’s economy and attributed gains in the financial market to the IMF review success.

He expressed hope that the dollar would further depreciate in the upcoming days, highlighting that Pakistan’s financial credentials — stocks, remittance, exports and foreign direct investment — had improved.

“The panic created by banks and market players regarding decline in the rupee … all these predictions have proven to be incorrect,” Paracha highlighted.

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