Gold prices soar by Rs100 per tola in Pakistan; IMF funding hopes lift stocks, bonds

Gulf Today Report

Pakistan's stocks, sovereign bonds and currency were lifted on Friday by growing hopes that the country can unlock funding from the International Monetary Fund after the government's overnight decision to end a months-old freeze on fuel prices.

Pakistani stocks jumped more than 2% and the country's sovereign dollar bonds jumped more than 3 cents.

According to a report in the local media, gold prices in Pakistan increased by Rs100 per tola (12.5 grams) as the rupee hit a historic low of 202.01 against the US dollar on Thursday.

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According to a jewellers body, the price of gold rose to Rs143,300 per tola. Meanwhile, the price of 10 grammes of gold increased by Rs85 to settle at Rs122,856.

Late on Thursday the government announced it would hike fuel prices after an agreement with the IMF that included an end to fuel subsidies, allowing the resumption of aid from a $6 billion package signed with the IMF in 2019.

"The market is reacting to the government's move to withdraw fuel subsidies," Saad Hashemy, executive director at BMA Capital Management, told Reuters. "It shows the government's resolve to address teething issues in the economy and will pave the way for the IMF programme and other funding sources."

The benchmark stock index was 2.26% higher at 0544 GMT, according to exchange data.