Monday Jul 18, 2022
KARACHI: The ruling PML-N's thumping in the Punjab by-elections that has triggered political uncertainty along with import pressure took the Pakistani rupee to a new low against the US dollar in the interbank market Monday.
Data released by the State Bank of Pakistan (SBP) showed that the local unit lost Rs4.25, or 1.97%, against the US dollar to close at an all-time low of Rs215.20.
It is the highest day-on-day depreciation after March 26, 2020.
On June 22, the rupee had closed at a record low of 211.93 against the greenback and since then the currency has remained volatile.
Pakistan-Kuwait Investment Company Head of Research Samiullah Tariq cited import payment pressure and political uncertainty as reasons for the rupee's hit.
The analyst told Geo.tv that Sunday's by-election results gave clarity but the market is awaiting a strategy going forward.
"[The] market is looking for a direction, therefore investors are anticipating what would be the way forward. Will the coalition government announce early elections or not?" said Tariq.
On the other hand, Arif Habib Limited analyst Ahsan Mehanti is hopeful that the depreciating rupee would recover soon as all speculations are in favour of the local unit.
Mehanti believes that the funds that Pakistan will receive from the International Monetary Fund (IMF) following the staff-level agreement will give the local currency a "much-needed breather".