The Pakistan Stock Exchange (PSX) saw a strong performance on Friday, surging by over 300 points. The benchmark KSE-100 index initially jumped more than 800 points but moderated to close at 79,333, up 315 points for the day.
This boost followed the central bank’s decision to cut its key policy rate by 200 basis points to 17.5 per cent. This rate cut, the third consecutive reduction since June, aims to stimulate economic growth as inflation begins to ease.
The State Bank of Pakistan’s Monetary Policy Committee stated that the real interest rate remains adequately positive to reduce inflation to the medium-term target of 5-7 per cent and ensure macroeconomic stability.
In addition, positive news from the International Monetary Fund (IMF) contributed to the market's optimism as the IMF board is set to review Pakistan’s new $7 billion bailout program at the end of the month.
Finance Minister Muhammad Aurangzeb confirmed that all issues with the IMF had been resolved and would be finalised in the upcoming board meeting on September 25.
Pakistan’s sovereign dollar bonds also experienced gains, with the 2031 maturity bond trading 1 cent higher at 79.93 cents on the dollar.
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