PSX surges by over 2000 points after IMF deal

KARACHI: The benchmark KSE-100 index at the Pakistan Stock Exchange witnessed a massive upwards surge on Monday morning by gaining over 2,000 points, after Pakistan reached a staff level agreement with the International Monetary Fund (IMF) to secure a new $3 billion loan.

The market was up by 2,269.23 points by 9:30am and trading had to be paused for an hour because the KSE-100 hit its upper circuit limit. As of 11:17am, the index was up by 2,434 points and is trading at 43,887.

According to the index, the market is up by 5.41%.

This record-breaking opening comes after Pakistan secured a last minute staff-level deal with the IMF for a $3 billion stand-by arrangement.

The agreement – still subject to approval by the IMF executive board in mid-July– was finalised on Friday.

The $3 billion IMF loan was greater than anticipated as Pakistan was hoping to unlock the remaining $2.5 billion from a $6.5billion bailout package clinched with the lender in 2019, which expired last week.

The removal of import restrictions by the State Bank of Pakistan, in line with the IMF’s prerequisite conditions, is also seen as a major factor for the positive spike of the stock market.

The stock market is expected to rally in coming days as Pakistan expects loans from other lenders including the World Bank and friendly countries to boost its foreign exchange reserves and pay some crucial debts.