Business & Economy

Stocks surge after Pakistan, IMF finalize $700 million payout deal

Islamabad, Nov 16 (EFE).- Pakistan and the International Monetary Fund (IMF) have reached a preliminary deal to unlock a $700 million payout from a $3bn rescue package, leading to an unprecedented surge in the Pakistani stock market on Thursday.Following the announcement, the Pakistan Stock Exchange 100 index soared by 716.96 points, representing a 1.26 percent increase, to reach an all-time high of 57,549.26 points on Thursday.Meanwhile, the Pakistani currency strengthened by 0.26 percent against the US dollar in the interbank market, the country’s Central State Bank said.The initial agreement for the payout was reached following an IMF team’s visit to Islamabad from Nov. 2 to 15.The team conducted a thorough review of Pakistan’s economic situation within the framework of an IMF program signed with the country in June, encompassing a total of $3bn bailout funds.“The IMF team has reached a staff-level agreement (SLA) with the Pakistani authorities on the first review of their stabilization program supported by the IMF,” the global lender’s Pakistan mission chief, Nathan Porter, said in a statement late on Wednesday.The agreement is subject to approval of the IMF’s Executive Board, Porter said.“Upon approval around US$700 million will become available bringing total disbursements under the program to almost US$1.9 billion,” he said.Islamabad had already received the first tranche of $1.2 billion in July.Following the two-week review of Pakistan’s economic stabilization program, the IMF acknowledged that “a nascent recovery is underway, buoyed by international partners’ support and signs of improved confidence” in the country.The IMF noted that the high inflation experienced by Pakistan this year “is expected to decline over the coming months amid receding supply constraints and modest demand.”However, the IMF emphasized that further reforms and actions were still needed to stabilize the country’s economy.“Pakistan remains susceptible to significant external risks, including the intensification of geopolitical tensions, resurgent commodity prices, and the further tightening in global financial conditions. Efforts to build resilience need to continue,” it said.The recent economic crisis in Pakistan prompted the IMF, in June, to resume its rescue loan program for the country under specific conditions.These conditions include reforms to advance planned fiscal consolidation, accelerate cost-reducing measures in the energy sector, attract investment, and support job creation in the country. EFEaa-daa/bks/mcd

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