Financial markets were boosted by the Pakistan-IMF deal

Following the staff-level agreement between Pakistan and the International Monetary Fund (IMF), the benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) rallied above 57,000 points, while the rupee also rallied against the dollar during of the intraday transaction in the interbank market.

Pakistan, a day earlier, had reached a staff-level agreement with the IMF on the first review of its $3 billion bailout.

Following approval by the Fund’s Executive Board, Pakistan will have access to approximately $700 million, bringing total disbursements under the program to nearly $1.9 billion, the IMF said in a statement on Wednesday.

Today, the rupee snapped its 17-session losing streak after gaining 2.14 against the dollar and is trading at Rs 286 against the dollar in the interbank market during intraday trade. Geo News. The local currency had closed at Rs 288.14 on Wednesday.

On the PSX, the benchmark KSE-100 crossed 57,000 points around 10:20 am, setting another milestone.

In a conversation with Geo.tv, Dr Khaqan Hassan Najeeb, a former adviser to the finance ministry, said the PSX was opened because of the staff-level agreement with the IMF. He added that the $700 million from the global lender would help Pakistan pave the way for “much-needed” external financing.

“The IMF approval means that the government has worked on fiscal consolidation as well as the change in energy prices that limits cyclical debt,” Dr Najeeb said.

The economist believes that the flow of external financing “will provide some comfort to the foreign exchange market as well as to increase supply and debt securities, including multilateral financing, program and project loans.”

He added that bilateral loans and conversions, friendly countries and commercial capital will start flowing in after the IMF deal.

“The rupee will of course be determined by the kind of flows we see and the kind of demand that is created from the import side. In the long run, I always say that the rupee’s parity with any foreign currency is a function of the country’s productivity,” said Dr Najeeb on the rupee appreciation.