Pakistan's Stock Market Crashes 14% Amid Rising Tensions
Karachi Stock Exchange halts trading after sharp decline; economic instability deepens
Markets
- Updated 8 days ago
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Pakistan's stock market has experienced a significant downturn, with the Karachi Stock Exchange (KSE) halting trading on Thursday after a sharp decline exceeding 6%. Since the Pahalgam terror attack on April 22, the KSE-100 index has plummeted over 13%, dropping from 118,430 to 103,060. Similarly, the KSE-30 index has fallen more than 14% during the same period.
This market slump reflects broader economic challenges. Pakistan's foreign exchange reserves stand at approximately $15.93 billion, with the State Bank of Pakistan holding $11.10 billion as of early March. These reserves are under pressure due to external debt repayments and a widening gap between inflation and interest rates.
The country's economic situation is further strained by political instability and the escalating conflict with India. The recent military exchanges, including the closure of airspace and suspension of bilateral agreements, have heightened investor uncertainty.
Pakistan is seeking a $1.3 billion loan from the International Monetary Fund (IMF) to bolster its economy. However, the IMF has expressed concerns about Pakistan's debt sustainability, warning that without addressing fiscal challenges, the country faces significant external financing risks.
In summary, Pakistan's financial markets are grappling with a confluence of internal and external pressures, including declining stock indices, strained foreign reserves, and escalating geopolitical tensions. The government's ability to navigate these challenges will be crucial in stabilizing the economy
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