February 18, 2019
Saudi Crown Prince Muhammad bin Salman visits Pakistan
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Pakistan Stock Exchange fell down by 1100 points in just one day. Experts believe that various reasons have contributed to this much decline. One of the apparent reasons is government heeding to take assistance from the International Monetary Fund (IMF), the option which the government did not want to avail.
However, Prime Minister Imran Khan cleared all the doubts and explained the government’s position concerning with respect to bailout package from IMF. Mr Khan said, “It is highly likely that we go to IMF and if we do not, it will plunge us into a severe balance of payment crisis.”
Pakistan foreign exchange reserves are already attaining a new low. In September, the reserves were around $9billion whereas with passing days they went down to $8.4Billion, enough to pay for imports till the end of the year. Their decline is among the main causes ensuring stock exchange to be in the doldrums.
According to Chairman of AKD Group Aqeel Karim Dhedhi, the reasons for the conversions on Monday are the same: reduction in foreign exchange reserves and devaluation in the value of rupee. He told a leading newspaper that “Going to IMF will mean further devaluation of our currency and increase in the interest rate. Resultantly, the investors will extract their investment from the stock exchange.”
Adding to that, he said, “The interference of international actors is also causing economic corrosion.”