Positive momentum at PSX as IMF Approves first review of economic reform program

The approval from the IMF’s Executive Board follows a staff-level agreement reached between the Fund and Pakistan on Nov 15.

Positive momentum at PSX as IMF Approves first review of economic reform program. The Pakistan Stock Exchange (PSX) experienced a robust surge for the second consecutive session on Friday following the successful conclusion of the International Monetary Fund’s (IMF) Executive Board’s first review of Pakistan’s economic reform program.

As per the latest data available on the PSX website, the KSE-100 index witnessed a substantial gain of 565.79 points, or 0.88 per cent, at 11 am, reaching 65,183.35 from the previous close of 64,617.56.

The Executive Board of the IMF wrapped up the first review of Pakistan’s economic reform program supported by the Stand-By Arrangement (SBA). In response to this positive development, the Finance Ministry announced an immediate disbursement of SDR 528 million (approximately US$ 700 million), bringing the total disbursements under the SBA to US$ 1.9 billion.

The approval from the IMF’s Executive Board follows a staff-level agreement reached between the Fund and Pakistan on November 15, 2023, underlining the nation’s unwavering commitment to implementing crucial reforms.

Caretaker Finance Minister Shamshad Akhtar and Army Chief General Asim Munir played instrumental roles in securing the IMF’s approval, reflecting the coordinated efforts of the Pakistani authorities.

The current IMF program, amounting to $3 billion, is scheduled to conclude in the second week of April 2024, with approximately $1.8 billion yet to be disbursed. The Fund had previously released the first tranche of $1.2 billion in July.

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Notably, on November 16 of the previous year, Pakistan and the IMF reached a staff-level agreement on the first review under Pakistan’s SBA. The agreement reinforces the authorities’ dedication to advancing fiscal consolidation, expediting cost-reducing reforms in the energy sector, restoring a market-determined exchange rate, and pursuing state-owned enterprise and governance reforms to attract investment and bolster job creation while simultaneously strengthening social assistance initiatives. The positive developments are expected to contribute to the nation’s economic stability and growth in the coming months.