Markets react positively to Pakistan-IMF developments
Pakistan Stock Exchange (PSX) on Monday reacted positively to the developments between Pakistan and the International Monetary Fund (IMF), which have reportedly agreed in principle to extend the pending $6 billion Extended Fund Facility (EFF) programme by one year and increase the loan size to $8 billion.
At the time of filing this report, the benchmark KSE-100 Index was being traded at 45,909.55 points, up 356.53 points or 0.78%.
“The positivity in the markets comes amid the statement given by the international lender on extending the EFF till 2023,” said Tahir Abbas, Head of Research at Arif Habib Limited (AHL), while talking to Business Recorder. He added that the positivity is expected to persist throughout the day.
In a late-night development on Sunday, it was learnt that Pakistan has requested the IMF to extend the Extended Fund Facility (EFF) arrangement through June 2023.
The IMF expects to send a mission to Pakistan in May to resume discussions over policies for completing the 7th EFF review.
Nathan Porter, IMF Mission Chief for Pakistan, issued the following statement:
“We had very productive meetings with the Finance Minister of Pakistan Miftah Ismail over Pakistan’s economic developments and policies under the Extended Fund Facility program. We agreed that prompt action is needed to reverse the unfunded subsidies which have slowed discussions for the 7th review.
“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 authorities have also requested the IMF to extend the EFF arrangement through June 2023 as a signal of their commitment to address existing challenges and achieve the program objectives.”
A number of experts had earlier pointed out that the resumption of IMF’s EFF was critical to revive market sentiments. The IMF program is seen as crucial for Pakistan’s economy that has seen its central-bank-held foreign exchange reserves reach a critical level of $10.89 billion.
Meanwhile, Miftah at a press conference in Washington said that he and his team had very good discussion with the IMF, the World Bank and IFC. He said the incumbent government will fulfill all sovereign commitments made by the previous governments with IMF and regarding CPEC.