Pakistan: IMF’s $7 billion bailout sparks market surge; Karachi Stock Exchange rises for second straight day – Market News

The International Monetary Fund’s (IMF) $7 billion bailout has spurred an unprecedented market rally in Pakistan. Latest data shows Pakistan’s benchmark index, the Karachi Stock Exchange, is up for a second straight day. On Monday, Pakistan’s benchmark stock index rose 1.44 percent to a record high, Reuters reported. On Tuesday, Bloomberg morning trading data showed the KSE rose 1.37 percent to 81,129.38 points.

Non-stock market,PakistanAs reported by Reuters, U.S. international bonds also rose on Monday, according to Tradeweb data, with the bond due in 2029 rising as much as 0.7 cents on the dollar to be bid at 90.5 cents, just shy of the two-year high the bond hit on Friday.

The IMF Agreement and Pakistan’s Economic Crisis

The nuclear-weapon state of Pakistan has seen economic cycles of boom and bust for decades since its founding in 1948. Pakistan has received 22 IMF bailouts since 1958. It is currently the IMF’s fifth-largest debtor nation, with $6.28 billion in debt as of July 11, according to IMF data.

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The current economic crisis is Pakistan’s longest in recent history, with record inflation pushing the country to the brink of defaulting on its sovereign debt last year.

According to the IMF agreement, the highest effective tax rate is The tax rate could rise to as much as 45% from the current 15%, taking effect from 2025. Securities and investment bank JS Global has called it an “unprecedented” move.

(Provided by Reuters)