Islamabad: Shares at the Pakistan Stock Exchange (PSX) took a major hit on Friday after a staff-level agreement with the International Monetary Fund (IMF) for the completion of the ninth review of a $7 billion loan program was postponed. The benchmark KSE-100 index plummeted 1.34% to 41,898.38 points, wiping out 568.21 points, causing a temporary halt in trading for Friday prayers. The delay in securing the agreement put pressure on the market, with Topline Securities CEO Mohammad Sohail predicting that the downward trend could continue if the delay extends.
An IMF delegation, which had been in Pakistan for ten days of talks with the government, announced that virtual talks would continue. Later in the day, Finance Minister Ishaq Dar confirmed that the government had received the Memorandum of Economic and Financial Policies (MEFP) from the IMF, indicating that a staff-level agreement with the lender was still in the works. The MEFP will be discussed over the weekend, with a virtual meeting scheduled between the two sides.
The country’s foreign exchange reserves have dwindled to $2.916 billion, enough for only 16 or 17 days of imports, making the completion of the ninth review a pressing matter. The review would unlock a disbursement of $1.2 billion from the IMF and inflows from friendly countries and other multilateral lenders.
