Pakistan stocks rally after policy rate cut, positive developments on IMF front

Stockbrokers monitor the latest share prices at the Pakistan Stock Exchange (PSE) in Karachi on July 3, 2023. (AFP/File)
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Updated 13 September 2024
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Pakistan stocks rally after policy rate cut, positive developments on IMF front

  • The benchmark KSE-100 index rose by more than 800 on Friday morning
  • It declined in the afternoon session to close at 79,333, up by 315 points

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.


Pakistan, China call for more ‘visible, verifiable’ actions to dismantle ‘terrorist’ groups in Afghanistan 

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Pakistan, China call for more ‘visible, verifiable’ actions to dismantle ‘terrorist’ groups in Afghanistan 

  • Foreign ministers of China, Pakistan co-chair seventh round of strategic dialogue in Beijing to review bilateral cooperation, regional situation
  • Pakistan accuses Kabul of facilitating attacks launched by militant outfits from Afghanistan’s soil, a charge Kabul has repeatedly denied

ISLAMABAD: Pakistan and China on Monday urged Afghanistan to take more visible actions to dismantle “terrorist organizations” based in its country, vowing to work with world powers to encourage Kabul to adopt moderate policies and integrate into the international community. 

Ties between Pakistan and Afghanistan remain strained as Islamabad alleges militant outfits, mainly the Tehreek-e-Taliban Pakistan (TTP) group, uses Afghan soil to launch attacks against Pakistan. Islamabad accuses the Afghan Taliban government of facilitating these attacks against Pakistan, charges Kabul have repeatedly denied. 

The joint statement by China and Pakistan was released after a meeting of both countries’ foreign ministers, Ishaq Dar and Wang Yi, in Beijing. Dar and his Chinese counterpart co-chaired the Seventh Round of China-Pakistan Foreign Ministers’ Strategic Dialogue in Beijing on Jan. 4 where they reviewed cooperation in trade, investment, economic sectors, counterterrorism, defense and regional matters. 

“The two sides called for more visible and verifiable actions to dismantle and eliminate all terrorist organizations based in Afghanistan which continue to pose serious threats to regional and global security, and prevent terrorist organizations from using the Afghan territory for terrorism against any other country and to endanger any other country,” the statement read. 

The joint statement said the two countries will work with world powers to encourage Kabul to adopt an inclusive political framework, moderate policies, and pursue good neighborliness. 

On bilateral cooperation, China and Pakistan said they had agreed to focus on industry, agriculture and mining, and also promote the building and operation of the Gwadar Port in southwestern Pakistan. 

“The two sides will deepen cooperation in areas such as trade and investment, information technology, science and technology, cybersecurity, technical and vocational training and education, and people-to-people and cultural exchanges,” the statement said. 

“The two sides agreed to further strengthen cooperation in the financial and banking sectors, including extending mutual support at regional and international multilateral financial forums. Pakistan appreciated China for providing support for its fiscal and financial sectors.”

The joint statement said China commended Pakistan’s “comprehensive measures” to combat “terrorism” and protect Chinese personnel, projects and institutions in the country.

“The two sides reiterated their commitment to combating terrorism in all its forms and manifestations with zero tolerance, and agreed to further deepen all-round cooperation on counter-terrorism and security, and make concerted efforts to ensure that the China-Pakistan Belt and Road cooperation advance in a secure and smooth manner,” the statement said. 

Pakistan and China expressed their willingness to conduct a transboundary water resources cooperation, stressing the importance of fulfilling international legal obligations. The statement comes as Pakistan frequently accuses India of violating a water-sharing agreement between the two neighbors, claiming New Delhi purposefully diverts the flow of water away from its territory. 

Islamabad has warned that any move by New Delhi to stop or divert the flow of Indus rivers to Pakistan will be considered an “act of war.”

Pakistan and China also demanded an unconditional, comprehensive and permanent ceasefire in Gaza in their joint statement, reaffirming their support for the Palestinian people’s right to self-determination and for the implementation of a two-state solution in the Middle East. 

“The two sides also expressed their concern at the situation in the occupied West Bank, and urged the need for urgently addressing it,” the statement said.