ISLAMABAD, July 3 (Xinhua) — Pakistani stocks posted their highest single-day gain on Monday as the Pakistani rupee rose against the dollar after the IMF and the Pakistani government struck a staff-level deal to inject $3 billion into the country’s ailing economy.
On Monday, the Pakistan Stock Exchange closed at 43,899 points, up 2,446.32 points from Friday’s close of 41,452.68 points.
“PSX posted a historic one-day gain today (Monday), with KSE-100 up 2,446 points to close at a 14-month high,” said leading stockbroker Arif Habib Ltd.
“On a defense basis, it had its best performance ever. In the past three sessions, the KSE-100 has gained 3,834 points (+9.57%),” he said.
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The Pakistani government and the International Monetary Fund (IMF) reached a long-awaited staff-level agreement last week, pushing Pakistan to the brink of default after months of negotiations to inject $3 billion into the struggling economy.
Prime Minister Sheikh Baz Sharif congratulated the stock market rally in a statement on Monday, saying the economy was showing signs of recovery thanks to the government’s “hard work and sound policies”.
The Pakistani currency also quickly recovered to 5 rupees against the dollar as stocks rallied.
According to the Pakistan Foreign Exchange Association, the open market rate appreciated to Rs 285 but interbank rates were not available due to bank holidays.
Malik Bostan, chairman of Exchange Companies Association of Pakistan (ECAP), expects the value of the dollar to fall to 275 rupees in the coming days.
“We expect that after the IMF agreement, Pakistan will also receive financial assistance from other global institutions, which will reduce the demand for dollars,” he said.
The International Monetary Fund last week agreed to provide $3 billion in just nine months, but that has caused the government such a headache that it almost forced it to accept harsh conditions.
The prime minister, who has to be in constant contact with the IMF chief to secure loans, told a cabinet meeting he chaired that the entire country should work together to solve the country’s economic problems for at least the next 15 years. scourge.
He called the IMF deal a “respite” but also a “worrying moment” and hoped it would be the last loan.
“I pray this is the last IMF deal. But it’s easier said than done,” he said, reminding cabinet colleagues that inefficient state-owned enterprises cost about 600 billion rupiah a year.
The Prime Minister thanked UN Secretary-General Antonio Guterres for his role in the IMF agreement and thanked China for its support over the past three months, renewing more than $5 billion in sovereign and commercial bank loans.
He also thanked Saudi Arabia for pledging $2 billion to Pakistan, and the United Arab Emirates and the Islamic Development Bank for $1 billion each.
He also appreciated the efforts of Army Chief of Staff Gen. Asim Munir to secure a total of $3 billion in support from Saudi Arabia and the UAE.
Pakistan wants $1.1 billion from the IMF this month and the remainder over the next nine months. But the fund’s support has opened up a variety of multilateral and bilateral lending and aid avenues for the country.
The agreement avoids the threat of default in the short term, but the country needs to take stringent policy actions and measures to address long-standing balance of payments problems.
(This is an unedited and auto-generated story from a syndicated news feed, the latest staff may not have modified or edited the body of content)