Pakistan’s key stock gauge surged by the most in over three years on Monday

Pakistan’s key stock gauge surged by the most in over three years on Monday after the nation clinched an initial $3 billion loan deal from the International Monetary Fund, easing default fears.

The nation’s key benchmark KSE-100 Index rose 5.8% at 9:32 a.m. local time, triggering a one-hour market halt. Trading in the nation’s stocks had reopened on Monday following the three-day Eid holiday. The currency market remained shut through Tuesday.

The rebound comes as the country secured a lifeline from a potential debt default last week after a draft agreement with the IMF. Pakistan is going through its worst economic crisis on record with sky-high interest rates and inflation.

“This IMF arrangement provides some comfort to investors over Pakistan’s ability to overcome short term external repayments,” said Ruchir Desai, fund manager at Asia Frontier Capital Ltd. based in Hong Kong. “I would say next few weeks market should do pretty well.”