- Currency registers 15th successive decline
- Rising political noise, delay in resumption of IMF programme continue to dent sentiment
The rupee extended its fall for the 15th consecutive session against the US dollar on Wednesday, as escalating political tension and delay in resumption of the International Monetary Fund (IMF) programme took a toll on market sentiment.
As per the State Bank of Pakistan (SBP), the currency closed at 201.92, the lowest in history, after a day-on-day depreciation of 51 paisas or 0.25%.
During intra-day trading, the rupee dropped to as low as 202.21 before recovering marginally by close.
On Tuesday, the rupee had finished at 201.41. Cumulatively, the Pakistani currency has shed over 8% in the previous 15 sessions.
With IMF talks ongoing in Doha, amid expectation of delay in a formal announcement, and rising political noise in Pakistan, the market is taking into account lack of a clear economic policy as a signal for further worsening sentiment.
On Wednesday, the Pakistan Tehreek-e- Insaf (PTI) also began its long march, clashing with law-enforcement personnel, in its bid to pressure the government into calling early elections.
“The market is in panic owing to the ongoing political situation, which is creating massive fluctuations in dollar rates in the market,” Samiullah Tariq, Head of Research at Pak-Kuwait Investment Company Limited, told Business Recorder.
Earlier, the federal cabinet had decided to stop the PTI from holding a long march to the federal capital in order to ensure the safety and security of the residents of the city.
However, on the call of PTI Chairman Imran Khan, party workers moved ahead from different points in the country especially Punjab and Khyber Pakhtunkhwa.
The rupee's fall comes despite Saudi Arabia announcing on Tuesday that it is finalising the extension of a $3-billion deposit to Pakistan. However, experts remained skeptical the announcement would be enough to change the rupee's position.
“News that Saudi Arabia is finalising the extension of $3 billion deposit is encouraging, but it is not enough to prop up Pak rupee because exchequer needs cash support," said Asad Rizvi, ex-Country Treasurer of Chase Manhattan Bank.
“Similarly IMF, Chinese and other funds too, are in the pipeline, but the hammering of Rupee has not stopped,” he added.
Inter-bank market rates for dollar on Wednesday
BID Rs 201.30
OFFER Rs 201.80
In the open market, the PKR lost 75 paisas for buying and one rupee for selling against USD, closing at 201.50 and 203, respectively.
Against Euro, the PKR lost one rupee for both buying and selling, closing at 213 and 215, respectively.
Against UAE Dirham, the PKR lost 10 paisas for buying and 20 paisas for selling, closing at 54.90 and 55.40, respectively.
Against Saudi Riyal, the PKR lost 10 paisas for buying and 20 paisas for selling, closing at 53 and 53.50, respectively.
Open-market rates for dollar on Wednesday
BID Rs 201.50
OFFER Rs 203