July 12, 2024

KARACHI:

In line with expectations, the Pakistan Stock Exchange (PSX) opened with a jump of 5.38%, or 2,231 points on Monday, the first session after the country achieved the International Monetary Fund (IMF) lifeline during the Eid holidays.

 

PSX benchmark spiked to 43,684 points in the opening moment at 9:31 am. Trading at the stock exchange, however, halted for 60 minutes immediately after opening to settle large orders under prevailing rules.

 

Pakistan signed a short-duration (nine-month) worth $3 billion loan programme with the IMF last week, following the revival of the $7 billion programme that was officially ending prematurely the same day.

 

The programme is expected to make the required foreign exchange available to reopen imports, help listed companies to gradually ramp up the partially closed production and reenergise economic activities in the country.

 

Read PSX shows signs of recovery amidst economic struggles

 

The new programme has signalled other donor agencies and friendly countries to extend new financing to Islamabad as they pledged $9 billion at a Geneva meeting in January 2023.

 

The inflows would also boost foreign exchange reserves and allow the cash-strapped country to prepare for reopening imports.

 

The market had remained locked in the range of 40,000-42,000 points for the past few months amid the partial closure of the domestic economy.

 

The critically low foreign exchange reserves at $3.5 billion had peaked at risk of default which now receded in the short to medium run amid the revival of the IMF programme.

 

It, however, remains to be seen whether the market will sustain the

historical single-day gains in the short-run at a time when the central bank’s key policy rate stands at a record high.

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