Pakistan’s Khan demands early polls after by-election win

Bloomberg

Former Pakistan premier Imran Khan called for early national elections after his party swept the by-elections in the country’s most populous state, underscoring the risks the government faces as it seeks a bailout from the International Monetary Fund.
Khan was ousted in April following a protracted political drama that saw Shehbaz Sharif take over as prime minister. Since then Khan has held massive public rallies demanding the country head to the ballot ahead of the scheduled October 2023 dates. He’s now touting Sunday’s electoral win as a sign of popular support for his party.
“The only way forward from here is to hold free & fair elections under a credible ECP,” Khan said in a tweet, referring to the Election Commission of Pakistan. “Any other path will only lead to greater political uncertainty & further economic chaos.”
Khan’s Pakistan Tehreek-e-Insaf has won 15 out of 20 seats up for grabs in the Punjab state legislature and Sharif’s Pakistan Muslim League-Nawaz got four seats, Punjab Election Commission director Abdul Hameed said by phone.
Since coming to power, Sharif has been pushed to take unpopular decisions —including raising energy prices and taxes as well as reducing spending — to revive its bailout program with the IMF. The country secured a $1.2 billion loan from the multilateral lender last week to shore up dwindling foreign exchange reserves.
Pakistan expects to receive about $4 billion in external financing from friendly countries after July, following an agreement with the IMF on revival of its bailout package.
The country has a bond repayment due in December, which will be closely watched by markets to see if Pakistan can meet its obligations. The political and economic crisis has seen the bond’s yield surge since February. It reached a record 42% this month after trading below 10% since it was issued in 2017.
Both stocks and the rupee dipped in intraday trading Monday on the likelihood of early elections. The rupee slumped 1.9%, the most in more than two years, to a record 214.8 per dollar. The benchmark KSE-100 Index slid 1.8%. The nation’s dollar bond due in 2031 was indicated 0.6 cents lower at 52.85 per dollar.
The Punjab by-election results has increased political uncertainty and it comes at a time when Pakistan’s economy is still in a fragile state, said Raza Jafri, head of equities at Intermarket Securities Ltd. in Karachi.
Khan, a former cricket star, has accused the ruling coalition —made up of Pakistan Muslim League-Nawaz and Pakistan’s Peoples Party —of colluding with the country’s powerful military and the US to push him out, an allegation they have all denied.