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#stockmarket #dollar #imf

After securing a monumental $3 billion deal with the International Monetary Fund (IMF), the Pakistan Stock Exchange witnessed a remarkable surge on the first working day following the agreement. During early trading, the benchmark KSE-100 Index experienced a notable increase of 2,372.93 points, reaching a new high of 43,825.61. This surge was a significant jump from the previous level of 41,452.68 recorded the previous Tuesday before the Eid holidays commenced.

However, due to the volatile nature of the market, trading had to be temporarily suspended at 9:37 am when the KSE-100 Index reached 43,439.33. The activation of the "Halt market" mechanism was necessary as the index had surged by more than 5 percent during the session. Trading resumed at 10:42 am, and the bullish sentiments prevailed, with the KSE-100 Index climbing by 2,372.93 points or 5.72 percent, ultimately reaching 43,825.61 at 11:05 am.

This significant boost in the stock market was facilitated by the depreciation of the US dollar against the rupee, even amidst the Eid holidays. The successful IMF agreement resulted in the availability of the US dollar at rates lower than the official interbank rate of Rs285.99 in certain cases. As a consequence, individuals started selling the US dollars they had hoarded or kept as financial guarantees in the market.

Several experts anticipate a potential strengthening of the rupee by at least Rs30 in the next one or two days. On June 30, Pakistan finalized the $3 billion staff-level agreement with the IMF, which coincided with the expiration of the previous deal.

According to the IMF, a staff-level agreement on policies supported by a Stand-by Arrangement (SBA) has been reached between the IMF staff and Pakistani authorities. The agreement is currently awaiting approval by the IMF Executive Board, with the review expected to take place by mid-July. Throughout the process, the IMF staff team, led by mission chief Nathan Porter, held both in-person and virtual meetings with Pakistani authorities to discuss a new financing engagement under an SBA.

Porter announced the staff-level agreement on a nine-month SBA and emphasized the critical importance of fully and timely implementing the program, considering the challenging circumstances. The new deal entails Pakistan meeting various conditions and targets set by the IMF, including reforms in the power sector, such as tariff hikes for electricity and gas, as well as allowing the market to determine the exchange rate of the rupee.
#imf #pmshehbazsharif #stockmarket

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