Islamabad: The KSE-100 index experienced a significant drop of 1,702 points yesterday, closing at 154,440 with a trading volume of 985 million shares. This substantial decline comes as the State Bank's Monetary Policy Committee (MPC) is set to convene today, amidst widespread expectations that the policy rate will be maintained at 11%. Adding to the economic concerns, the government has reduced provident fund returns due to fiscal constraints.

The International Monetary Fund (IMF) has announced its intention to scrutinize Pakistan's flood-related expenditures and budgetary flexibility. Pakistan is also preparing to issue Panda bonds before December. Meanwhile, Prime Minister Shehbaz Sharif is scheduled to participate in a Pakistan-co-sponsored Arab-Islamic Summit in Qatar on Monday.

In other financial developments, the weekly Sensitive Price Indicator (SPI) inflation decreased by 0.02%. Pakistan is seeking IMF consent for electricity bill relief in regions affected by floods, while stakeholders hold differing views on the impact of the floods on supplies.

The government is exploring the possibility of utilizing Independent Power Producers' (IPPs) berths. Concerns have been raised about revenue losses of Rs100 billion in three months under the faceless customs system. The southward movement of floodwaters presents further challenges. Discussions are ongoing regarding Pakistan's response to Qatar's proposal to defer LNG cargo deliveries beyond 2030.

The State Bank of Pakistan injected Rs12.5 trillion in liquidity into the market. The pharmaceutical industry has defended deregulation, while textile exports are contingent upon the European Union's policies. The Trade Policy Board (TPB) has approved the commercial import of five-year-old used vehicles with a 40% additional duty.