KARACHI, Pakistan (Reuters) - Pakistan’s stock market on Monday closed down 2 percent after briefly hitting a two-year low, weighed down by a global selloff and the new government seeking a bailout from the International Monetary Fund (IMF).
The Pakistan Stock Exchange’s benchmark 100-share index lost 750.36 point to close at 36,767.57, down 2 percent.
The KSE has shed 10 percent since Oct. 1 on worries over dwindling foreign reserves and a currency devaluation in response to a ballooning current account deficit.
The finance ministry said last week the government was approaching the IMF for assistance to help stabilise the economy, amid a deepening balance-of-payments crisis.
“After close to 10 percent fall in the last two weeks, there are margin calls which is affecting share prices,” said Mohammed Sohail, chief executive of Topline Securities brokerage.
“Also, the global selloff and local economic issues are forcing investors to trim their positions.”
The rupee has also plunged at least 7 percent since the new government of Prime Minister Imran Khan announced last week Pakistan needed IMF assistance to ward off a financial crises.
The current account deficit widened 43 percent to $18 billion in the year that ended on June 30, while the fiscal deficit ballooned to 6.6 percent.
Foreign currency reserves dropped in late September to $8.4 billion, enough to cover import costs for less than two months.
Pakistan has not said how much money it needs but Finance Minister Asad Umar said it has external debt payments of about $8 billion due by December.
Writing by Asif Shahzad; Editing by Simon Cameron-Moore