Stocks rallied Monday following news of Saudi Arabia’s plans to renew the $3 billion deposit with Pakistan and the hopes of the International Monetary Fund program’s (IMF) revival.
Pakistan Stock Exchange’s (PSX) benchmark index KSE-100 opened today’s trade at 42,857.57 points, however, later it went up by 764.25 points or 1.78% and closed at 43,621.82 points.
Capital market expert Muhammad Saad Ali said rising optimism around the resumption of the IMF program and appreciation of the rupee has improved market sentiments.
Not only did the stocks rally during the intraday trade, but the Pakistani rupee also continued to strengthen against the US dollar for the tenth successive session in the interbank market.
The local unit further gained Rs1.51 after over a week of its uptrend, with the greenback closing at Rs213.98 after its depreciation in the interbank market.
Alpha Beta Core CEO Khurram Schehzad said the stock market was recovering after the confidence of the investors who were earlier jittery was restored.
Saudi Arabia is planning to renew the kingdom’s $3 billion deposit with Pakistan, Bloomberg reported, as the cash-strapped country desperately seeks financial assistance.
“The kingdom also plans to provide $100 million a month for 10 months in petroleum products that will be granted as additional support,” the publication quoted the people.
Once the plan becomes official, Pakistan’s $4 billion funding gap a pre-condition of the International Monetary Fund (IMF) will be fulfilled, paving way for the revival of the lender’s program.
The IMF had set a condition that the cash-strapped nation needed to fulfill its $4 billion financing gap for the loans to be disbursed under the combined seventh and eighth reviews.
Minister for Finance and Revenue Miftah Ismail has confirmed that the IMF Executive Board is expected to meet on August 29 for taking up Pakistan’s request to approve the seventh and eighth reviews and release a tranche of $1.17 billion under the Extended Fund Facility (EFF).
“We have received the Letter of Intent (LoI) copy, and we will send it back to the IMF’s executive board on Monday,” the finance minister told The News.
Pakistan received the much-awaited LoI from the IMF Friday, which would be sent back to the Fund’s executive board with the request to revive the stalled program under the EFF.
