“IMF delay, lack of clarity in the new government’s economic plan and (the) rising political temperature are seriously affecting Pakistani stocks,” Topline Securities CEO M.c. said on Twitter.
The Pakistan Stock Exchange’s 100 index fell 1,447.67 points, or 3.23%, to 43,393.14, its lowest close since March 22.
Prime Minister Shahbaz Sharif took power last month after ousting former Prime Minister Imran Khan, who was accused of mismanaging the economy.
Shahbaz Sharif’s government, however, has yet to implement economic policies such as the reduction of costly energy subsidies, introduced by the Khan government in its final days in office as it faced increasing pressure from inflation. growing.
The new government’s reluctance to withdraw subsidies as agreed with the IMF last month is making the situation worse, said Samiullah Tariq, head of research and development at the Pak Kuwait Investment Company.
Pakistan is in dire need of external financial support due to a growing current account deficit and foreign reserves falling below $10.5 billion, equivalent to less than two months of imports.
Prime Minister Sharif visited Saudi Arabia and the United Arab Emirates last week, but could not obtain firm assurances of funding.
When the new government took power last month, the stock index rose to 46,601 points on April 15 from 44,444 points on April 10, when Khan’s government was ousted. Since then, the index has plunged 3,208 points, or 6.9%.
With uncertainty over further support for Pakistan’s public finances, the Pakistani rupee slipped to 187.53 rupees to the dollar on Monday, from a close of 186.63 on Friday.
Political uncertainty also continued to simmer, with Khan announcing that he would march with hundreds of thousands of supporters to the capital Islamabad on May 20 to demand immediate new elections.