The Pakistani rupee hit an all-time low against the US dollar on Monday to 230 during intraday trade, as compared to its rate of 228.37, according to the data from the State Bank of Pakistan (SBP).
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.
In a recent presentation to international investors, the acting governor of Pakistan’s central bank, Murtaza Syed, said: “Markets are responding to these shocks in an unfairly broad-brush way, without paying enough attention to Pakistan’s relative strengths.”
Saad Ali, a capital market expert, said 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 pressures on the currency have eased, as per the SBP, 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 PKR depreciation,” Ali added.