The stock market remained optimistic on Thursday as the feeling of investors increased after the announcement of a historical commercial agreement between Pakistan and the United States, in the middle of the continuous optimism about macroeconomic stability and the continuity of the policy of the Central Bank.
Benchmark KSE-100 KSE-100 index of the Pakistan Stock Exchange rose to an intradic maximum of 140,215.22, winning 1,802.97 points, or 1.3%, from the previous closure of 138,412.25. The index also touched a minimum of 139,369,06, more than 956.81 points, or 0.69%.
“The positive feeling in the US trade agreement is a diplomatic success, especially when people compare higher duties with Indian export,” said Independent Investment and Economic Analyst Aah Soomro.
“The hope is that the American association -Pakistan continues to strengthen itself, which leads to economic stability under the IMF,” he added.
In a great diplomatic advance, the president of the United States, Donald Trump, confirmed the end of a commercial agreement between the two countries. The development indicates an impulse in the bilateral economic ties at an at a time when India continues to face high tariffs and winds against geopolitics due to its energy ties with Russia.
According to the Ministry of Finance, the agreement was concluded during the meeting of the Minister of Finance Muhammad Aurengzeb with the United States Secretary of Commerce and the United States commercial representative. Pakistan ambassador to the United States Rizwan Saeed Sheikh and Commerce Secretary Jawad Paul were also present.
A statement from the Ministry said that the purpose of the agreement is to improve bilateral trade, improve market access, attract investments and strengthen cooperation in energy, minerals, IT and emerging sectors such as cryptocurrency.
The agreement includes tariff reductions in Pakistani exports to the United States and aims to promote American investment in Pakistan infrastructure and development projects, marking a new phase in economic cooperation between the two countries.
Meanwhile, the State Bank of Pakistan (SBP) maintained its key policy rate without changes in 11% during the meeting of the monetary policy committee on Wednesday, citing risks and persistent inflation pressures on the commercial balance.
In his subsequent statement, the SBP said that inflation projections have worsened slightly due to unexpectedly high gas rates settings, but noted that price pressures are expected to stabilize within the target range advanced.
SBP Governor Jameel Ahmad, at a later press conference, said inflation would probably remain between 5% and 7% during fiscal year 2016, although temporary violations above the upper band were possible in a few months. He added that the commercial deficit was expected to be expanded as economic activity would be recovered.
On Wednesday, the KSE-100 index won 447.43 points, or 0.32%, to close at 138,412.25, compared to 137,964.82 in the previous session. The index touched a maximum of 139,018.88 and a minimum of 137,658,81 during the session.
