Pakistani stocks, currency appreciate in response to Islamabad-IMF staff-level agreement 

Stock brokers monitor share prices displayed on a digital screen during a trading session at the Pakistan Stock Exchange (PSX) in Karachi on February 12, 2024. (AFP/ File)
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Updated 26 March 2025
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Pakistani stocks, currency appreciate in response to Islamabad-IMF staff-level agreement 

  • IMF on Tuesday announced reaching staff-level agreement with Islamabad on first review under Extended Fund Facility
  • Stocks close at 117,772 points, gaining 1 percent while the rupee inches 0.1 percent up to close at Rs280.2 against the greenback 

KARACHI: Pakistan’s stocks and currency markets on Wednesday reacted positively to Islamabad’s staff-level agreement (SLA) with the International Monetary Fund (IMF), with financial analysts noting that the agreement has eased market sentiments.

The IMF announced on Tuesday it had reached a staff-level agreement on the first review under Pakistan’s Extended Fund Facility (EFF) and on a new arrangement under the Resilience and Sustainability Facility (RSF). 

Subject to approval from the IMF’s Executive Board, the SLA will ensure “Pakistan will have access to about $1.0 billion (SDR 760 million) under the EFF, bringing total disbursements under the program to about $2.0 billion,” the global lender said. 
The benchmark KSE-100 Index at the Pakistan Stock Exchange (PSX) rallied to an intraday high of 118,220 points on Wednesday, gaining 1.4 percent or 1,588 points from the previous close. The stocks closed at 117,772 points with a 1 percent total increase. 
“Definitely, the IMF agreement on Pakistan’s first review and climate financing was a major trigger for the market,” Sana Tawfik, the head of research at Arif Habib Ltd. brokerage company, told Arab News.

The current IMF review is critical for debt-ridden Pakistan, which has been grappling with a balance of payment crisis and has so far recorded a $691 million surplus this year in eight months till February, compared with its $1.7 billion deficit a year earlier. 

Pakistan is carrying out IMF-backed structural reforms and expects to expand its economy by 3.6 percent this fiscal year.

“We are committed to structural reforms for sustainable long-term growth and prosperity,” Pakistan’s finance adviser Khurram Schehzad told Arab News. 

Pakistan’s stock index rose 89 percent to 78,445 points in FY24, according to data from the Pakistan Stock Exchange.

Tawfik said she expected the index to increase to a record 123,000 points by June this year, once Pakistan receives the IMF’s first tranche under review.

“The overall market sentiments are IMF-driven,” Tawfik noted.

STABLE RUPEE OUTLOOK

Pakistan’s national currency also appreciated on Wednesday, inching 0.1 percent up to close at Rs280.2 against the US dollar in the interbank market. 

After depreciating about 0.7 percent this year since July, the rupee has stabilized in the range of Rs280-281 against the dollar.

“The rupee would have taken a hit had this agreement not been made,” Owais ul Haq, a foreign exchange dealer at Arif Habib Ltd., told Arab News. 

Haq said he expected the rupee to remain stable at the Rs280-281 mark, adding that anything below this rate would hurt exporters.

A healthy inflow of remittances stabilizes the supply of dollars in the country, helping the rupee stay stable against the greenback.

Pakistan expects to receive more than $35 billion in remittances this year through June, as overseas Pakistan remitted a record $1.3 billion in February, primarily due to “seasonal factors” such as Ramadan and Eid.

“I see a stable outlook for the rupee going forward,” Haq said. 

Muhammad Zafar Paracha, secretary general at the Exchange Companies Association of Pakistan, agreed the IMF agreement would help the rupee stay stable against the dollar.

“The investors were feeling a bit jittery, but this IMF agreement has eased market sentiments,” he said. 

“The rupee has shown some appreciation in the interbank and open market and will strengthen more in the days to come,” he added. 

Addressing the federal cabinet on Wednesday, Prime Minister Shehbaz Sharif said Pakistan’s agreement with the IMF would help it ensure long-term economic stability.

Sharif noted that Pakistan was able to increase its tax-to-GDP ratio to 10.6 percent, exceeding the IMF’s target of 10.2 percent. 

“This is the highest tax collection ratio in the last four years,” he said.

The prime minister said that the IMF required his government to collect Rs12.9 trillion in taxes this year but then agreed to revise its target to Rs12.1 trillion rupees.

Pakistani authorities fixed the tax collection target to Rs12.33 trillion and were able to increase collection by 26 percent, he said, describing it as a “quantum jump.”


Tirah Valley residents flee homes ahead of Pakistan’s planned anti-militant army offensive

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Tirah Valley residents flee homes ahead of Pakistan’s planned anti-militant army offensive

  • Families flee militant-hit region on days-long journeys amid bitter winter cold
  • Cash aid announced but displaced residents cite lack of evacuation planning

PAINDA CHEENA, Pakistan: In the rugged mountains of Pakistan’s Tirah Valley, long lines of tractor-trolleys and mini-pickups inched toward a registration camp earlier this month. 

The vehicles were stacked with bedding, food supplies and families escaping their homes as a military operation against militants looms in the conflict-striken northwestern region. 

At the Painda Cheena registration point, 60-year-old Hajji Muhammad Yousuf sat wrapped in a shawl, waiting with dozens of others after traveling nearly 40 kilometers from his village in Maidan Tirah, a journey that took four days instead of the usual few hours. He still faces another 66-kilometer trip to Bara, near the northwestern city of Peshawar, the provincial capital of Khyber Pakhtunkhwa. 

Like thousands of others, Yousuf is leaving behind a fully furnished home ahead of an expected security offensive in the volatile border region near Afghanistan.

“Today is our fourth night here,” Yousuf said. “We have left fully furnished houses behind ... There are no facilities, no amenities for us. We are facing great hardships.”

Families load their belongings onto vehicles in Pakistan’s Tirah Valley on January 15, 2026. (AN photo)

Officials say the evacuation could affect up to 20,000 families, marking a significant escalation in Pakistan’s campaign against the proscribed militant group Tehreek-e-Taliban Pakistan (TTP). Despite major military operations in the mid-2010s, Tirah Valley has remained a stronghold for insurgents, prompting authorities to plan what they describe as a targeted clearance.

The scale of displacement has placed acute pressure on limited local infrastructure. While the journey from Maidan Tirah to the registration point at Mandi Kas normally takes around two hours by vehicle, congestion and verification procedures have stretched the trip into days for many families.

“Last night, a woman died of hunger in Sandana,” Yousuf said. “There is no arrangement for medicine, no doctor, no food, no washroom. Women and children are facing problems.”

Displaced residents say they feel trapped between militant threats and state action.

“We ourselves are opposing terrorism, yet we do not understand why, if a Taliban comes in the evening and we give bread, the government comes in the morning asking why the bread was given,” Yousuf said. “In the end, we were forced to do this [to leave].”

RELIEF MEASURES

The Khyber Pakhtunkhwa (KP) provincial government has announced a compensation package for displaced families. Talha Rafi, assistant commissioner for Bara, said authorities had set up 15 biometric counters at the registration site.

“One person receives a one-time compensation of Rs255,000 ($911), and a monthly Rs50,000 ($179) is provided,” he said, adding that SIM cards were being issued to ensure digital disbursement of funds.

Families load their belongings onto vehicles in Pakistan’s Tirah Valley on January 15, 2026. (AN photo)

Provincial officials say the payments are intended to cover basic needs during displacement, though residents and tribal elders argue that cash alone cannot offset the absence of shelter, health care and transport arrangements during evacuation.

The evacuation has also exposed tensions between the provincial government and Pakistan’s military establishment over the use of force in the region.

“We have neither allowed the operation nor will we ever allow the operation,” KP Law Minister Aftab Alam Afridi said, arguing that past military campaigns had failed to deliver lasting stability.

“These people are our own people. They are also the people of this state, the people of this province. We will definitely take care of them,” he said, adding that the KP cabinet had approved what he described as “a large package” for the displaced families.

Federal authorities and the military have signaled a firmer stance. While Federal Information Minister Ataullah Tarar and the military’s public relations wing did not respond to requests for comment, military spokesperson Lt. Gen. Ahmed Shareef Chaudhry has previously defended security operations as necessary.

Families sittinng in vehicles with their belongings in Pakistan’s Tirah Valley on January 15, 2026. (AN photo)

In a recent briefing, Chaudhry said security forces carried out 75,175 intelligence-based operations nationwide last year, including more than 14,000 in Khyber Pakhtunkhwa, attributing the surge in violence to what he described as a “politically conducive environment” for militants.

Analysts say political divisions have allowed the TTP to regain ground. 

Peshawar-based journalist Mehmood Jan Babar said many militants now operating in Tirah are local residents who returned after refusing settlement offers in remote parts of Afghanistan.

“Whenever we have seen division at the national level, the Taliban have taken advantage of it,” he said.

But for families waiting in freezing conditions at Painda Cheena, such strategic calculations offer little comfort. Tribal elders accuse civil authorities of ordering displacement without adequate logistical planning.

“The government has, without any administrative arrangements, ordered these people to migrate,” said Muhammad Khan Afridi, an elderly local resident. “You yourselves are seeing what suffering these people are facing, what humiliation they are experiencing.”

As a January 25 evacuation deadline approaches, uncertainty dominates daily life for those uprooted.

“Bringing peace is in the government’s hands,” Yousuf said. “It is up to them whether they normalize the situation or drive us out again tomorrow.”