Stock Market crashes
ISLAMABAD: The stock market in Pakistan crashed on Thursday due to a deepening political and economic uncertainty in the country.
The benchmark KSE-100 index experienced a decline in its fifth consecutive session. On Thursday the benchmark KSE-100 index lost over 1200 points during intraday trading.
The KSE-100 index continued its bearish trajectory, plummeting by more than 1200 points to reach 44,950 at 3:05 pm. It marked a decline from the previous day’s closing value of 46,244 points.
Economic experts attribute this decline in the KSE to a lack of clarity concerning politics and the economy. The market is witnessing selling pressure due to economic uncertainty and the continuous devaluation of the rupee.
Ahsan Mehanti said, “The bearish close was an outcome of the caretaker finance minister’s statement. In her statement, she discussed the fiscal limitations to provide relief on power bills, along with concerns about the unresolved circular debt crises in the power sector.”
Notably, the market had experienced a significant drop amid rumors that the State Bank of Pakistan was planning to raise interest rates by up to 300 basis points.
Conversely, the rupee remained under pressure and further depreciated against the US dollar in the open market on Thursday. The dollar-rupee exchange rate hit 328 rupees in open market trading on Thursday.
According to the Forex Association of Pakistan (FAP), the rupee’s value had declined to Rs305.80 against the dollar in the interbank market.
Economy of Pakistan is sinking rapidly: Stock market crashes
Meanwhile,
After the approval of the IMF loan, everyone in the country and abroad was anticipating economic revival and stability in Pakistan. However, things have gone the wrong way and the economy of Pakistan has, once again, landed into reverse gear especially after the formation of caretaker government. The foreign exchange reserves, stock market, remittances, exports, and value of rupee are steadily declining with the passage of time.
In recent days, the KSE-100 index has lost more than 3,000 points, falling to 45,450 points on Thursday (August 30) while the rupee has plunged to 327 rupees versus the US dollar in the open market trading, from 292 rupees when the caretakers came to power. Most of the other key economic indicators are in a similar state of decline, demonstrating that economy of Pakistan is sinking rapidly.
Additionally, the business community, exporters, industrialists, and consumers are bemoaning the IMF-driven frequent increase in power, gas tariffs, and hikes in domestic petroleum prices. This situation is dragging the country towards an economic mess day by day. It appears that in the next three to four months, once again Pakistan will be struggling with the default-like situation. The ongoing IMF program is expiring by March 2024, but before that, the economy of the country and the consumers, including business persons, will be in serious trouble just because of the rapid deterioration in the key economic indicators especially the regular devaluation of the rupee.
