Pakistan Rupee, At All Time Low Owing To Political Instability

Pakistani rupee fell to an all-time low against the dollar on Tuesday when it closed at Rs 222 in the interbank market, as the coalition government announced to complete its term. A high-level huddle of the nine-party alliance meeting in Lahore chaired by Prime Minister Shehbaz Sharif to ponder over the stunning victory of their common nemesis Pakistan Tehreek-e-Insaf (PTI) of Imran Khan in the Punjab bye-election on Sunday.

Addressing a press conference after the meeting, Railway Minister Saad Rafique said the coalition government had the right to complete its term. "The federal government will complete its term and will work for the country's betterment. There should be no doubt about this," he said.

The minister's statement came as the dollar went up by Rs 8.8, or 4 per cent, in a day to reach Rs 224 during the day, according to the Forex Association of Pakistan (FAP), but later recovered slightly and closed at Rs 221.99, appreciating 3.1 per cent, according to the State Bank of Pakistan (SBP). Former premier Imran Khan, lashing out at the government, said the dollar was at Rs 178 when his government was removed through an alleged "US regime conspiracy".

"Today it is Rs 224 and in free fall despite the IMF agreement. The economic meltdown shows Sharifs never had any expertise in running the economy or administration. Their only expertise is looting, money laundering and getting NROs (concessions)," he tweeted. The government is under pressure after failing to get the much-needed dollar from the IMF despite bending its back to the limits.

The delays by the fund to release the committed loan has created uncertainty both in the money, as well as, in the capital market. The Pakistan Stock Exchange (PSX) witnessed bloodbath as the benchmark KSE-100 index lost over 900 points following the fall of the rupee to an all-time low against the dollar.

According to the PSX website, the KSE-100 Index opened at 41,367.11 points and went up 176 points initially. But soon the bears took control and the market began sliding. At around 3.25 pm, the index hit 40,313.78 points - a decline of 1,053.33 points or 2.55 per cent.

The index closed at 40,389.07 points, down 978.04 points or 2.36 per cent. As the financial woes multiply, the popularity of the coalition government received a jolt when PTI won 15 out of 20 seats in the Punjab assembly bye-elections, making it highly likely that the ousted party along with Pakistan Muslim League-Quaid would make a government in the largest province of Pakistan. The election for the chief minister are expected to be held on July 22 and Chaudhry Pervaiz Elahi is likely to replace the son of the prime minister, Hamza Sharif, as the chief minister.

(PTI)