The benchmark KSE-100 Index of the Pakistan Stock Exchange (PSX) dropped more than 750 points during intraday trading on Wednesday as the International Monetary Fund (IMF) program’s restart was delayed. As a result investor mood at PSX remained negative.
However once purchasing interest was noticed in the last few minutes when the index showed a modest rebound. The KSE-100 Index dropped by more than 750 points earlier and came close to the 39,000 mark.
With the exception of a few car businesses, most industries were in the red despite the State Bank of Pakistan’s proposal to relax some import restrictions. The equities market has been suffering due to uncertainties surrounding the restart of the IMF programme.
Market experts and economists have believed that the market should have risen as a result of Finance Minister Ishaq Dar’s video message to PSX investors on Wednesday. However, the lack of observable improvement in the balance of payments especially the delay in the anticipated inflows from Saudi Arabia was the reason for the market’s downward trajectory.
Experts have said that stocks dropped as a result of the fluctuating Pakistani rupee and the effects of the Forex crisis on industrialists.
Since the beginning of the current fiscal year, the local currency has decreased by Rs19.06 or 8.52 percent in relation to the dollar.
Given that Pakistan’s meagre foreign exchange reserves were barely enough to fund a month’s worth of imports, IMF’s ninth review in order to release $1.18 billion was imperative.
The foreign exchange reserves of the State Bank of Pakistan have decreased by $11 billion during the past 12 months. The central bank’s reserves were $17.686 billion in December 2021 while as of December 9 they were $6.7 billion.
In the remaining months of the fiscal year, Pakistan must repay at least $13 billion in debt. Fears of default have been raised since it has been uncertain when it would get further inflows from bilateral and international organizations.