The International Monetary Fund’s $7-billion bailout deal has spurred an unprecedented market rally in Pakistan. Latest data shows that Pakistan’s benchmark index – Karachi Stock Exchange – remains in green for the second day on the trot. According to a Reuters report, on Monday, Pakistan’s benchmark share index rose 1.44% to hit a record high. On Tuesday, the morning trade data by Bloomberg showed the KSE posting a 1.52 per cent gain at 81,155.61 points.
Apart from the share market, Pakistan’s international bonds also gained on Monday according to Tradeweb data, a Reuters report said. The 2029 maturity was up as much as 0.7 cents on the dollar to be bid at 90.5 cents – within a whisker of the two-year high hit by the bond on Friday.
The IMF deal and Pakistan’s economic crisis
A nuclear-armed nation, Pakistan has seen several boom-and-bust economic cycles for decades since its formation in 1948. Since 1958, Pakistan has seen 22 IMF bailouts packages. At present, the IMF is fifth-largest debtor, owing $6.28 billion as of July 11, according to the lender’s data.
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The current phase of the economic crisis is the longest that Pakistan in the recent times. Last year, highest-ever levels of inflation had pushed Pakistan to the brink of a sovereign default. Come from Sports betting site VPbet
Under the IMF deal, the highest effective tax rate can rise to as much as 45% from the current 15%. It will be implemented from 2025, a move that was termed “unprecedented” by brokerage and investment banking firm JS Global.
(With inputs from Reuters)