Government

Pakistan stock exchange is down nearly 1,000 points

The Pakistan Stock Exchange (PSX) reduce by over 1,000 points on Monday as venture nabob reopen the selling orgy due to economic variability and political tumult in the country.

The PSX gauge KSE-100 Index was down by over 2percento 43,903 points by noontide. “Stocks faced selling pressure among a one-week retard in talks between Pakistan and IMF for the restart of the loan program,”

The country has not succeeded in gaining any fresh rescue packages from friendly countries, including Saudi Arabia and UAE, during Prime Minister Shehbaz Sharif’s current visit. The selling pressure was seen over the board and foreign venture capitalist were also muse concerning selling their stocks as Pakistan’s foreign trade hold have used up and are hanging around $10.5 billion the lowest in two years. With this, the country’s bring-in cover has laid to a 1.5-month level from normally around 3 months.

Experts said Pakistan’s balance of payment crisis pushed investors to sell part of their holdings at the PSX

Pakistan and the International Monetary Fund (IMF) may begin talks on May 18 in Doha. As the country’s options to avoid insolvency have been limited. After it could not immediately receive any major financial support from its three friendly countries.

Subject to the government’s willingness to start withdrawing fuel subsidies from May 15. The two sides have tentatively planned to meet in Qatar for policy level discussions to revive. The program and extend its tenure and size to $8 billion. A senior government functionary told The Express Tribune.

The IMF has informed the government that it could send a mission to Doha for one week on May 18 for talks with Pakistan on the revival of the Extended Fund Facility, said the officials. However, Prime Minister Shehbaz Sharif will have to overcome all obstacles from his cabinet members before that and has to make a decision on fuel subsidies.

The development comes amid a delay in the finalization of new loan deals with Saudi Arabia, China, and the United Arab Emirates (UAE)

Late last year, the country had secured a $1.2 billion annual oil facility. ($100 million per month) on deferred payment at an interest rate of 3.8%.

Instead, the sources said, Saudi Arabia has offered to facilitate Pakistan. In receiving oil facility from the Islamic Development Bank’s commercial arm International Islamic Trade Finance Corporation (ITFC). Or from the Organization of the Petroleum Exporting Countries (OPEC) Fund for International Development.

ITFC oil facility has a 4.5% interest rate

But the ITFC and OPEC Fund facilities would be different from what Pakistan was seeking. Pakistan is already availing of the ITFC oil facility at a 4.5% interest rate.

The government had also requested Saudi Arabia to reduce interest rates on the existing cash. And oil facilities, but this seemed difficult. Last month, Finance Minister Miftah Ismail requested. The IMF to extend the program duration from September 2022 to June 2023. And also increase the loan size from $6 billion to $8 billion.

The country’s external financial situation remains precarious. As it is left with only $10.5 billion in gross official foreign exchange reserves. While its monthly import bill was $6.6 billion in April. The $10.5 billion is inclusive of $4 billion from China. $3 billion from Saudi Arabia, and $2.5 billion from UAE deposits.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button