As a bridge and breather before a broader and longer reform programme to enforce financial discipline and reduce debt default risks, the nine-month $3 billion Stand-By Arrangement (SBA) with the International Monetary Fund is generally viewed as a breather. The policymakers and capital markets have been relieved, but hope for an early recovery is not enthusiastically raised.

Due to shrinking national income (GDP), cash- and dollar-starved Pakistan has a daunting task of repaying $25 billion in debt. By doing so, the space available for investment would be squeezed.

It is expected that raising new capital through the stock exchange will remain muted despite the extraordinary rally in the share market attributed to the SBA. In 2022-23, Globe Residency (a real estate investment trust) raised Rs1.4 billion through an IPO.

Dollars fell by Rs23.49 to Rs275.44 in the interbank market on July 4 from the peak of Rs298.93 on May 11 on expectations of higher greenback inflows.