ISLAMABAD: The Pakistan Stock Exchange (PSX) on Friday rallied by more than 300 points, according to the PSX website, following a policy rate cut by the central bank and positive developments with regard to the country’s International Monetary Fund (IMF) bailout.
The benchmark KSE-100 index rose by more than 800 on Friday morning, but declined in the afternoon trading session to close at 79,333, up by 315 points.
A day earlier, the central bank cut its key policy rate by 200 basis points to 17.5 percent — the third straight reduction since June as the country looks to spur growth as inflation eases.
“The MPC assessed the real interest rate to still be adequately positive to bring inflation down to the medium-term target of 5–7 percent and help ensure macroeconomic stability,” the State Bank of Pakistan’s Monetary Policy Committee said in a statement, announcing the cut.
“This would be essential to achieve sustainable economic growth over the medium term.”
Separately, the IMF said its board would meet at the end of this month to discuss Pakistan’s new $7 billion bailout program that was agreed in July.
“All matters with the IMF have been settled amicably,” Finance Minister Muhammad Aurangzeb said in a statement on Thursday. “These matters will be finalized in the meeting of the IMF board this month.”
Pakistan’s sovereign dollar bonds also rallied on Thursday, with the 2031 maturity trading 1 cent higher to bid at 79.93 cents on the dollar, according to Tradeweb data.
