Rupee Kept Losing Value
In the interbank market on Wednesday, the rupee kept losing value, reaching a record low of Rs225 versus the dollar.
Finance Minister Miftah Ismail blamed political unrest for the decline.
Ismail told Reuters that political unrest was the main cause of the market’s worry and that it will pass in a few days. He also predicted that pressure on the rupee would decrease over the following few days.
Lack Of Economic Direction In The Midst
Analysts ascribed the fall to a lack of economic direction in the midst of the nation’s political unrest and the State Bank of Pakistan’s (SBP) inaction.
The rupee was trading at Rs225 at 10:30am, down Rs3.01 or 1.3% from yesterday’s finish of Rs221.99, according to the Forex Association of Pakistan.
Mettis Global Director Saad Bin Naseer
The value of the rupee is still falling, according to Mettis Global Director Saad bin Naseer, because the markets lack economic direction in the face of changing political conditions.
The PTI or the ruling coalition’s direction on the political front with regard to elections is necessary for the market to stabilize.
PTI Winning At Least 15 Of The 20 Seats
He was referring to the PTI winning at least 15 of the 20 seats up for election in the Punjab Assembly on July 17.
After winning, the PTI asserted that the incumbent Punjab Chief Minister, Hamza Shehbaz, lacked the legitimacy to hold the position while also calling for new general elections.
Inflows From The International Monetary Fund
As Naseer also noted, the markets are concerned about the future of inflows from the International Monetary Fund (IMF), friendly countries, and other sources, despite the State Bank listing both internal and international causes for the rupee’s drop.
Zafar Paracha, the general secretary of the Exchange Companies Association of Pakistan, accused the SBP and the government of failing to take action to halt the depreciation of the currency.
Since the market began today, the dollar has been moving upward. The SBP said yesterday that it had freed the rupee and that market forces will determine the exchange rate.