ISLAMABAD: US Ambassador Donald Blome expressed optimism over the ongoing negotiations between Pakistan and the International Monetary Fund (IMF) on Wednesday, as the global lending agency confirmed its executive board meeting for April 29 to discuss the approval of $1.1 billion funding for the South Asian state.
The funding is the second and last tranche of a $3 billion standby arrangement with the IMF, which it secured last summer to avert a sovereign default and which runs out this month. Pakistan is now seeking a new long-term and larger IMF loan, with finance minister Muhammad Aurangzeb saying Islamabad could secure a staff-level agreement on the fresh program by early July.
Ambassador Blome praised the performance of the country’s economic team in a meeting with the newly elected Senate chairman, Yousaf Raza Gillani, at the Parliament House wherein he also discussed strengthening of US-Pakistan bilateral relations.
“Acknowledging the positive economic indicators of Pakistan, Ambassador Blome noted the downward trend in inflation and high dollar reserves, stating that the IMF’s positive feedback would encourage investors,” said an official statement issued after the meeting. “He highlighted the flourishing gaming industry in Pakistan and called for enhanced [US-Pakistan] cooperation in the digital sector.”
The American envoy also noted the potential for further economic cooperation between the two countries in his conversation.
Pakistan’s $350 billion economy faces a chronic balance of payment crisis, with nearly $24 billion to repay in debt and interest over the next fiscal year — three-time more than its central bank’s foreign currency reserves.
Pakistan’s finance ministry expects the economy to grow by 2.6 percent in the current fiscal year ending June, while average inflation is projected to stand at 24 percent, down from 29.2 percent in fiscal year 2023/2024. Inflation soared to a record high of 38 percent last May.
With input from Reuters
US ambassador optimistic about Pakistan-IMF talks ahead of key funding meeting on April 29
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US ambassador optimistic about Pakistan-IMF talks ahead of key funding meeting on April 29
- The IMF has confirmed its executive board’s meeting to discuss the approval of $1.1 billion for Pakistan next week
- Ambassador Blome says the IMF’s positive feedback will further encourage investors and help Pakistan’s ailing economy
Pakistani stocks lose over 6,000 points due to heavy selling, regional tensions
- KSE-100 index fell 6042.26 points or by 3.21 percent to close at 182,338.12 points, Pakistan Stock Exchange data states
- Analysts say heavy selling triggered by Fauji Fertilizer Company’s earnings announcement, which fell short of expectations
KARACHI/ISLAMABAD: The Pakistan Stock Exchange (PSX) saw a massive drop of over 6,000 points on Thursday, which financial analysts attributed to heavy selling in the market and geopolitical tensions between Iran and the US.
The KSE-100 index fell by 6042.26 points or 3.21 percent to close at 182,338.12 on Thursday evening, the PSX data showed, down from the previous close of 188,380.38 points.
The development took place as US President Donald Trump warned Iran this week that “time is running out” for the nation to negotiate a deal on its nuclear program, following the steady build-up of US military forces in the Gulf.
Meanwhile, Pakistani brokerage firm Topline Securities said equities witnessed a sharp sell-off in the stock market on Thursday, causing Pakistani stocks to plunge into a “severe downturn.”
“The steep decline was largely driven by Fauji Fertilizer Company’s (FFC) earnings announcement, which fell short of market expectations due to weaker-than-anticipated gross margins,” Topline Security’s Senior Equity Trader Naveed Nadeem said.
Nadeem noted that the FFC, United Bank Limited (UBL), Engro Corporation (ENGROH), Oil & Gas Development Company (OGDC), and Hub Power Company (HUBC) collectively shaved 3,155 points off the benchmark index during the session.
Najeed Warsi, chief business officer at Al Habib Capital Markets, agreed.
“FFC’s [Fauji Fertilizer Company] below-expectation results didn’t help, triggering a sell-off,” he added.
Ahsan Mehanti, CEO of Arif Habib Commodities, said geopolitical tensions between Washington and Tehran triggered the selling activity as well as the central bank’s recent decision to keep policy rate unchanged.
“Geopolitical uncertainty and SBP [State Bank of Pakistan] status quo in the policy rates projecting high inflation played a catalyst role in selling activity at PSX,” he said.
Pakistan’s central bank held its key policy rate unchanged at 10.50 percent on Monday, defying market expectations for further easing.
