In the interbank market on Wednesday, the rupee kept losing value, reaching a record low of Rs225 versus the dollar as Finance Minister Miftah Ismail blamed political unrest for the decline.
Ismail stated that the market’s panic was mostly caused by political unrest, which will pass in a few days. He also predicted that pressure on the rupee would decrease in the coming days.
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. 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 stabilise.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.
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.