https://arab.news/wa66t
- Development takes place following Pakistan’s staff-level agreement with IMF for $7 billion loan
- Analysts expect further cut by State Bank of Pakistan after June reduction of 150 bps
KARACHI: Pakistan’s benchmark share index rose 1% on Monday ahead of the first policy meeting of its central bank to decide a key interest rate, following a staff-level pact with multilateral lender the IMF and passage of a new budget.
Analysts expect a further cut by the State Bank of Pakistan (SBP) after a June reduction of 150 bps from an all-time high of 22%, which had been its first in nearly four years, aiming to boost growth amid a sharp decline in retail inflation.
Adnan Sheikh, assistant vice president of research at Pak Kuwait Investment Company attributed Monday’s market move to the “positive news flow over the weekend from China, along with expectations of rate cut.”
Pakistan has begun talks on reprofiling its power sector debt to China, along with talks on structural reform suggested by the International Monetary Fund (IMF), the finance minister told a press conference on Sunday.
The Chinese debt effort will be tackled on a project-by-project basis, the minister added, with Islamabad looking to appoint a domestic adviser in China.
The IMF agreed a $7-billion bailout this month for the heavily indebted South Asian economy but raised concerns over high rates of power theft and distribution losses that cause debt to accumulate across the production chain