The over $9 billion pledges made by various countries at the Geneva moot recently to help Pakistan deal with the post-flood challenge have not augured well for a battered stock exchange and a beleaguered Pak rupee.
Not only is almost every session of Pakistan Stock Exchange ending on a negative note, the battering of Pak rupee also remains unabated. PKR, for example, has declined in almost 20 consecutive sessions.
Numerous experts attribute this situation to the pending Ninth Review of International Monetary Programme. In my view, however, even the resumption of the programme will not be sufficient to restore investor or business confidence in a meaningful manner.
The principal reason behind this state of affairs is the precarious condition of foreign exchange reserves in the face of growing external sector challenges. That some wild rumours about country’s possible sovereign default are still making rounds is a fact.
The government, on the other hand, is trying harder to squash such speculations but without much success.
The evolving political scenario following the dissolution of the Punjab assembly and holding of local government elections in urban Sindh have failed to inject any stability into the situation from the investor’s perspective; these have only added to confusion and anxiety in the country. It increasingly appears that the country’s economy is ultimately tailspinning into chaos.
Khalida Nafis Khan (Karachi)
Copyright Business Recorder, 2023
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