Categories: BusinessPakistan

Political, economic uncertainty keeps rupee under pressure despite finance minister’s assurances

The Pakistani rupee continued its downward spiral against the US dollar in the interbank market during intraday trade Thursday, despite assurances by Finance Minister Miftah Ismail that pressure on the rupee will soon “vanish”.

The rupee was trading at Rs240 against the US dollar in the interbank market during intraday trade amid the ongoing economic and political uncertainty in the country.

The domestic currency lost 3.98 during the intraday trade. The local unit closed at 236.02 per dollar a day earlier. It fell by 1.31% during the session.

Meanwhile, dollar soared by Rs4 and traded at Rs245 in the open market, Geo News reported

Tahir Abbas, the head of research at Arif Habib Limited, said: “Shortage of dollars, political and economic uncertainty tagged with ambiguity regarding commitment from friendly countries, which is needed for disbursement of IMF tranche were the reasons behind rupee’s persistent slide.”

Fears have risen about Pakistan’s stuttering economy as its currency fell nearly 8% against the US dollar in the last trading week, while the country’s forex reserves stand below $10 billion with inflation at the highest in more than a decade.

Alpha Beta Core CEO Khurram Schezad told Geo.tv that the dollar is getting stronger in the global market almost against all the world currencies — and the rupee is not an exception.

In addition, he said, Pakistan’s external account issues are not settled as yet though imports are slowing.

He noted that although the International Monetary Fund is on board for disbursement, the flows are yet to materialise as the Executive Board’s final approval is awaited.

“Global rating agencies have put a negative outlook on the economy, so that is an additional burden that is weighing in on the financial markets in general and forex market in particular,” he added.

Muhammad Saad Ali, a capital market expert, told Geo.tv that the rise in political uncertainty — of whether the present government will remain in office long enough to stabilise the economy and the continued confusion around who governs the Punjab province — is causing the rupee to slip.

“Note that balance of payments pressure on the currency have eased, as per the central bank, which asserts that Pakistan has enough capital commitments for the next 12 months to take care of its dollar outflows,” he said.

“I reiterate political uncertainty is weakening market sentiment and leading to more rupee depreciation,” Ali added.

Web Desk

Recent Posts

Defence Minister Khawaja Asif Threatened in London

Defence Minister Khawaja Muhammad Asif was threatened and heckled by an unidentified individual at a…

20 hours ago

PTI Calls for Nationwide Protests on November 24

PTI founder Imran Khan has called for a major protest in Islamabad on November 24,…

20 hours ago

Donald Trump, Joe Biden promise smooth power transfer

President-elect Donald Trump visited the White House on Wednesday for the first time since winning…

20 hours ago

Nissan Global CEO & President recognises Al Masaood Automobiles’ Abu Dhabi Service Centre as world’s largest

ABU DHABI: Al Masaood Automobiles, the authorised distributor of Nissan in Abu Dhabi, Al Ain,…

23 hours ago

AIM Congress 2025 gears up to highlight how DeFi is transforming traditional finance ecosystem

ABU DHABI: Decentralised Finance (DeFi) market is expected to expand at a compound annual growth…

2 days ago

Menassah highlights prosperity of UAE publishing sector at SIBF 2024

SHARJAH: Menassah Distribution Company is showcasing the creativity of Emirati publishing during its participation in…

2 days ago