KARACHI:
Amid the International Monetary Fund (IMF) talks for the release of the next tranche, the Pakistan Stock Exchange (PSX) hit a two-month high at 43,450 points during the day trade on Monday.
The stock market was up by 1.39% (594 points) to trading at a two-month high of 43,541.50 points before the mid-day. The market regained over 3,500 points since positive development started taking place in the domestic economy over the past two weeks.
Simultaneously, the rupee recovered to a one-month high at Rs212.80 against the US dollar in the inter-bank market during early trading hours.
The US dollar was available for sale at Rs214 before the mid-day and had closed at Rs215.49 on Friday.
The rupee cumulatively recovered by approximately Rs26 in the past two weeks, compared to the all-time low of Rs239.94 hit on July 28, 2022.
The stocks and rupee held their ground following the IMF initiated talks for providing an additional loan of $2.8 billion to Pakistan. The loan will be in addition to the current one under the revival phase worth $7 billion at present.
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IMF executive board is scheduled to meet on August 29, 2022, to approve the release of $1.2 billion out of $7 billion to Pakistan.
Moreover, the Kingdom of Saudi Arabia has shown its willingness to roll over a loan of $3 billion for the country.
Following talks between the IMF and Saudi Arabia, the global creditor considered providing $2.8 billion from the kingdom quota in special drawing rights (SDRs) to Pakistan.
The developers boosted investors’ confidence in Pakistan’s economy in general and particularly in domestic stocks and rupees.
Friendly countries to plug financing hole
Pakistan is set to get assurances of $4 billion in additional financing from friendly countries this week that will pave the way for the revival of the IMF programme, the State Bank of Pakistan (SBP) Acting Governor Dr Murtaza Syed said earlier this month.
Saudi Arabia is the first country that has agreed to give a commitment to the IMF, a top government source confirmed.
“The discussions are taking place on various options to secure assurances for $4 billion financing and we hope that it will be done this week,” said the acting governor in an exclusive interview with The Express Tribune.
Pakistan was also in discussions with China for additional financing, he added.