KARACHI, Aug 29(ABC): Stocks rallied Wednesday after the International Monetary Fund (IMF) approved releasing a $1.17 billion tranche to Pakistan following several months of delay.
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index moved up 436.11 points or 1.03% to 42,940.45 points as of 9:40 am, up from yesterday’s close of 42,504.34 points.
The revival of the IMF programme has boosted the hopes of investors as it is expected that Pakistan will now receive funds from multilateral and bilateral organisations, apart from friendly countries.
After months-long hectic efforts, the global money lender approved the seventh and eighth reviews of the stalled $6 billion Pakistan programme, government officials announced Monday night.
Capital market expert Saad Ali told that the final nod from the IMF board has put an end to the long wait behind programme resumption.
“This will unlock more external inflows, which will support the currency while other macro indicators are showing gradual improvement,” the capital market expert said.
The expert added that the market confidence will increase on sustained macro improvement and lack of major political noise, which can extend the present rally.
In a statement, the Fund announced that the executive board completed the combined seventh and eighth reviews of the “extended arrangement” under the Extended Fund Facility (EFF) for Pakistan.
“The board’s decision allows for an immediate disbursement of SDR 894 million (about $1.1 billion), bringing total purchases for budget support under the arrangement to about US$3.9 billion,” the statement read.
Arif Habib Limited’s Head of Research Tahir Abbas said that IMF’s approval has paved the way for Pakistan to get the much-needed funding within the next three days.
In light of this, Pakistan is expected to get multilateral and bilateral financing from the Asian Development Bank (ADB), Islamic Development Bank (IDB), and World Bank.
