ISLAMABAD, 24th May, 2024 (WAM) -- An International Monetary Fund (IMF) mission and Pakistan have made significant progress towards reaching a staff-level agreement for an extended fund facility.
Reuters reported on Friday that the IMF has opened discussions with Pakistan on a new loan programme after Islamabad last month completed a short-term US$3 billion programme, which helped stave off a sovereign debt default.
An IMF team, led by mission chief Nathan Porter, concluded discussions with the authorities on Thursday after arriving in Pakistan on 13th May, the IMF said in a statement.
"The mission and the authorities will continue policy discussions virtually over the coming days aiming to finalise discussions, including the financial support needed to underpin the authorities' reform efforts from the IMF and Pakistan's bilateral and multilateral partners," Porter said.
The IMF's comments helped the Pakistan's benchmark share index scale a record high and breach the key 76,000 level. The index was last up 1.2 percent.
Adnan Sheikh, assistant vice president, research at Pak Kuwait Investment Company, attributed the rise to the IMF's comment and the United Arab Emirates (UAE) promising investment.
"Despite the 90 percent run-up in dollar terms over the past year, The KSE 100 is trading at price-earnings ratio 4x, which is well below its average," said Sheikh, adding that the ratio suggested that Pakistani equities might still have healthy room for further upside.
On Thursday, the UAE committed US$10 billion to invest in promising economic sectors in Pakistan. The announcement came during Pakistani Prime Minister Shehbaz Sharif's UAE visit.
Pakistan is likely to seek at least US$6 billion under the new programme and request additional financing from the IMF under the Resilience and Sustainability Trust.