KARACHI: Pakistan’s stocks and currency closed bullish on Monday as the country announced progress in negotiations with the International Monetary Fund (IMF) for the revival of a loan program that originally amounted to $6 billion but could further increase in size.
The IMF confirmed it held “productive meetings” with Pakistani officials, saying its mission chief Nathan Porter would visit the country in May to resume discussions over the seventh review under the program before the fund released the next tranche.
Negotiations between the two sides over the seventh review had stalled after former prime minister Imran Khan’s administration deviated from the program objectives by announcing subsidized fuel prices and electricity tariffs in February.
Pakistan’s finance minister Miftah Ismail told a news conference in Washington the IMF had agreed in principle to extend the bailout package for Pakistan for another year and add $2 billion to the total loan size.
The bulls celebrated the news at the Pakistan Stock Exchange, making the market gain 520 points to close at 46,073 against the weekend session’s bearish close on Friday.
“Stocks showed a sharp recovery while responding to reports of the IMF program extension for a year along with an addition of $2 billion to the $6 billion Extended Fund Facility,” Ahsan Mehanti, CEO of Arif Habib Corporation, told Arab News.
Following the successful IMF talks, Pakistan’s national currency also posted slight gains, with 0.38 percent appreciation.
The rupee closed at Rs186.05 as compared to Saturday’s close of Rs186.75 against the US dollar.
The IMF mission chief for Pakistan said in a statement his team had held fruitful meetings with the Pakistani finance minister.
“We agreed that prompt action is needed to reverse the unfunded subsidies which have slowed discussions for the 7th review,” Porter continued. “Based on the constructive discussions with the authorities in Washington, the IMF expects to field a mission to Pakistan in May to resume discussions over policies for completing the 7th EFF review.”
The breakthrough in talks can potentially lead to an inflow of $1 billion from the IMF, as the seventh review concludes.
“Other bilateral financing avenues, including the World Bank, could also materialize and unlock an additional $1.8 billion to $2 billion in financing,” KASB Securities said in its research report on Monday, adding: “A successful conclusion of the 7th review could provide a near-term respite to the PKR/USD parity.”
The south Asian country is facing financial constraints after the costly imports lifted the current account deficit to $1 billion in March 2022 with accumulated deficit to $13 billion during the current fiscal year.
The annual inflation rate during the month of March also increased to 12.7 percent, as compared to 12.24 percent in February, due to higher food prices.
Pakistan’s stocks and currency close bullish after headway in IMF talks
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Pakistan’s stocks and currency close bullish after headway in IMF talks
- The country’s equities and currency made 1.14 percent and 0.38 percent gains during Monday’s trading sessions
- IMF officials will visit Pakistan in May to resume discussions over the seventh loan program review
China backs Pakistan in fight against militancy after deadly Balochistan attacks
- China is a major ally and investor in Pakistan and has pledged over $65 billion in major infrastructure projects, including in Balochistan
- Chinese Foreign Ministry spokesperson Lin Jian says ‘we mourn for lives lost, and our hearts go out to injured and those who lost loved ones’
ISLAMABAD: China condemns the recent attacks that killed more than 200 people in Pakistan’s southwestern Balochistan province, a Chinese foreign ministry spokesperson said on Tuesday, reaffirming Beijing’s support for Pakistan in its fight against militancy.
The Baloch Liberation Army (BLA) group launched coordinated attacks in several cities across Balochistan on Saturday, killing 33 civilians and 17 security personnel. Officials said 117 militants were killed in skirmishes and follow-up operations.
Balochistan, which borders Iran and Afghanistan, is the site of a decades-long insurgency waged by Baloch separatist groups who often attack security forces, foreigners and non-local Pakistanis and kidnap government officials.
China is a major ally and investor in Pakistan and has pledged over $65 billion in investment in road, infrastructure and development projects under the China-Pakistan Economic Corridor (CPEC).
“China strongly condemns the [Balochistan] attacks... We mourn for the lives lost, and our hearts go out to the injured and those who lost their loved ones,” Chinese Foreign Ministry spokesperson Lin Jian said at a press briefing on Tuesday.
“China firmly opposes any form of terrorism and will as always firmly support Pakistan in combating terrorism, maintaining solidarity and social stability, and protecting the safety of the people.”
Chinese nationals working in Pakistan have often been targeted by militants, particularly in the southwestern Balochistan province, where China is developing a deep seaport that is touted as the crown jewel of CPEC.
Interior Minister Mohsin Naqvi said last week the attacks, claimed by the separatist Baloch Liberation Army (BLA), were planned from India. New Delhi rejected the allegation as “baseless,” saying Islamabad was attempting to deflect attention from its internal challenges.
Balochistan is home to vast reserves of minerals and hydrocarbons. Separatist militant groups such as the BLA blame Islamabad for exploiting Balochistan’s natural resources and denying locals a share in them. The military and civilian government reject these allegations and say they are investing in the province’s development.
