Monday, July 25, 2022
KARACHI: The rupee lost ground for the seventh consecutive session on Monday, closing at an all-time high of 229.88 against the US dollar in the interbank market as negative sentiment arising from Pakistan's political front persisted.
However, on a slightly positive note, the rupee regained some ground after having slipped to 232 in intraday trading.
According to data released by the State Bank of Pakistan (SBP), the local unit closed at 229.88 against the US dollar — surpassing its last record low of 228.37 against the greenback after a fresh decline of Rs1.51, or 0.66%.
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."
Muhammad Saad Ali, a capital market expert, told Geo.tv 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 pressure on the currency have eased, as per the central bank, 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 rupee depreciation," Ali added.