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Rupee continues sliding, closes at Rs234.32 in interbank market

A currency dealer is seen counting $100 notes; while Rs500 notes are kept on the table. — AFP/File

KARACHI: The Pakistani rupee continued to lose ground against the US dollar for the ninth consecutive session on Wednesday amid the bleak economic situation and the countrywide floods.

The local unit fell Rs2.40 to close at Rs234.32 in the interbank market, down in value from the previous close of Rs231.92 against the dollar, according to the State Bank of Pakistan.

Apart from the floods that even overshadowed the restoration of the International Monetary Fund’s (IMF) programme revival, the country is also witnessing political instability, which has kept investors on their feet.

Political instability has been ongoing in Pakistan since the ouster of Imran Khan’s government in April. Despite the passage of months, investors have several doubts about the policies of the incumbent government.

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Exchange Companies Association of Pakistan (ECAP) General-Secretary Zafar Paracha told that it was imperative for all stakeholders to sit at the talking table and resolve Pakistan’s issues.

The ECAP official said it was expected that once the International Monetary Fund’s (IMF) loan comes in, the rupee would gain ground against the dollar — and it did as it appreciated by Rs2.

But he noted that the downfall was persistent since then — with minor negligible gains — as, despite money from the global lender, the country did not get monies from multilateral and bilateral organisations.

Paracha added that Asian Development Bank (ADB), World Bank (WB), and friendly countries — Saudi Arabia, UAE, and Qatar — are still reluctant to give loans and invest in Pakistan.

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“The main reason behind this: political instability,” Paracha said, noting that on the day that the IMF’s Executive Board was about to approve handing over the amount to Pakistan, PTI’s governments in Punjab and KP announced that they will not fulfil the IMF requirements.

“A negative impact was made due to this. PTI rules a huge chunk of the country and it has its importance […] but right now, we need political stability and the government has no clear vision,” he lamented.

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Paracha said that despite being in the government, all the parties are behaving as if they are in the opposition. “No one is performing to provide relief to the people and no one is willing to restore the economy. Everyone is playing the blame game.”

But apart from criticising the government functionaries, Paracha praised the State Bank of Pakistan (SBP), saying that the institution has played an effective role through various policies over time.

Moving on to the impact of floods, Paracha said that government officials have estimated it to be around $30 billion, but he feared that it could be around $50 billion.

“The losses are massive, but we do not have enough donations to overcome the gap,” he said.

Floods from record monsoon rains and glacial melt in the mountainous north have affected 33 million people and killed almost 1,400, washing away homes, roads, railways, livestock and crops.

The government has also decided to import goods from Iran and Afghanistan, which in turn, has resulted in pressure on the rupee, he said.

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