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Thursday, June 13, 2024

PSX plunges by over 1000 points

Economic experts believe that the market is under pressure due to the widening current and fiscal account deficit and the depleting foreign exchange reserves.

In a major upset, the Pakistan Stock Exchange (PSX) has dropped at an alarming rate. The PSX has shed more than 1100 points on the first trading day of the week after the Eid-ul-Fitr holidays.

According to details, the KSE-100 index lost 1071 points during the early hours on the first day of the week and fell below the 44,000 mark. The PSX traded at 43,769 after the decline.

The dire situation has raised concern among investors. Moreover, economic experts believe that the market is under pressure due to the widening current and fiscal account deficit and the depleting foreign exchange reserves.

Read more: Pakistani stocks crash as Trump bans Europeans

Furthermore, debt repayment and the uncertainty surrounding the talks with the International Monetary Fund (IMF) for resuming the loan program have also kept the market on edge.

Meanwhile, the dollar was trading at Rs. 188.5 in the interbank at around noon on Monday as the rupee depreciated by Rs. 1.25, according to the Forex Association of Pakistan. The open market rate of the greenback was Rs. 187.8 at the same time. To clarify, the hike in dollar rates comes amid the oil import repayments.

PTI’s reaction to the market decline

Needless to say, the alarming situation of the market has resulted in backlash against the incumbent government.

Former Minister for Information and Broadcasting Fawad Chaudhry said that situation is not surprising.

“This situation should not come as a surprise when lolly-pop makers are appointed as the finance minister,” Fawad Chaudhry said while taking a dig at Finance Minister Miftah Ismail who owns a confectionery-making business.

Read more: New IMF program for Pakistan: Analyzing the rerun of balance of payment challenges

Former Minister for Planning Asad Umar too raised concern and called for early elections.

“Market falling again. Rupee continues to slide against the dollar. Complete paralysis of decision-making. How long can Pakistan bear the cost of uncertainty? What price the economy will pay before we realize elections are the only way out?” Asad Umar lamented.

Meanwhile, PTI spokesperson on finance Muzzammil Aslam claimed that the IMF has deferred a meeting with Pakistan authorities for the release of US $1 billion tranche until May 18 and is demanding a hike in petrol and diesel prices. Moreover, he also criticized the government.

“Issue with this government is legitimacy and duration. International donors and friendly countries never bail out a government with a split mandate. Secondly, no one is sure till what time government will last. Lastly, no policy and difference on economic policies withing PML-N and PDM partners not bodes well,” he tweeted.