Following the decision of Supreme Court to restore National Assembly, Pakistani rupee has made recovery to around Rs186 against the dollar on Friday as compared to all-time low of Rs189 on Thursday.
Earlier, on Thursday, Pakistani rupee had plunged to Rs189 against the dollar in interbank market amid political uncertainty in the country and massive outflow of foreign exchange reserves of $728 million in last week. Dollar had touched the highest level of Rs 189 at interbank and Rs 190.50 at open market. Pakistan rupee had broken all previous records and tumbled to above Rs189.25 against the dollar in the interbank market. On the same day, the State Bank of Pakistan in an emergency meeting had increased its policy rate by 250 basis points to 12.25 per cent.
Supreme Court of Pakistan unanimously ruled that the ruling of the National Assembly’s Deputy Speaker to block no-confidence motion against Prime Minister Imran Khan was “contrary to the constitution and the law and had no legal effect”. The top court restored the Parliament by declaring Imran Khan’s decisions to dissolve the National Assembly (NA) as invalid. The apex court decision has improved the currency value. Pakistani rupee finally made a comeback against the dollar on Friday, closing at Rs185.9 in the interbank. In the open market, the currency’s selling price was recorded at Rs188.05 and buying rate at Rs186.3.
Market sources are of the view that rupee value might further stabilise if political temperature cools down in next few days. However, there are still economic challenges, which might put pressure on the Pakistani rupee. These challenges included tumbling foreign exchange reserves, widening of current account deficit and stalling an International Monetary Fund (IMF) loan facility. The country’s foreign exchange reserves are depleting swiftly due to the repayment of previous loans. The reserves had declined by $3.628 billion in just two weeks periods at a time when talks between Pakistan and IMF had halted due to the political situation of the country.
The stalling of an IMF loan facility is also putting pressure on local currency. Another reason behind currency depreciation is widening of current account deficit. The current account deficit had widened to $12.099 billion in first eight months (July to February) of the current fiscal year against a surplus of $994 million in the same period of last fiscal year.
APP adds: Similarly, the price of the euro depreciated by Rs4.76 and closed at Rs 200.45 against the previous day’s closing of Rs 205.11. The Japanese Yen lost four paisas to close at Rs1.48, whereas a decrease of Rs5.90 was witnessed in the exchange rate of British Pound, which was traded at Rs240.65 as compared to its last closing of Rs246.55. The exchange rates of Emirates Dirham and Saudi Riyal decreased by 93 paisas to close at Rs50.28 and Rs49.24 respectively.
Earlier, on Thursday, Pakistani rupee had plunged to Rs189 against the dollar in interbank market amid political uncertainty in the country and massive outflow of foreign exchange reserves of $728 million in last week. Dollar had touched the highest level of Rs 189 at interbank and Rs 190.50 at open market. Pakistan rupee had broken all previous records and tumbled to above Rs189.25 against the dollar in the interbank market. On the same day, the State Bank of Pakistan in an emergency meeting had increased its policy rate by 250 basis points to 12.25 per cent.
Supreme Court of Pakistan unanimously ruled that the ruling of the National Assembly’s Deputy Speaker to block no-confidence motion against Prime Minister Imran Khan was “contrary to the constitution and the law and had no legal effect”. The top court restored the Parliament by declaring Imran Khan’s decisions to dissolve the National Assembly (NA) as invalid. The apex court decision has improved the currency value. Pakistani rupee finally made a comeback against the dollar on Friday, closing at Rs185.9 in the interbank. In the open market, the currency’s selling price was recorded at Rs188.05 and buying rate at Rs186.3.
Market sources are of the view that rupee value might further stabilise if political temperature cools down in next few days. However, there are still economic challenges, which might put pressure on the Pakistani rupee. These challenges included tumbling foreign exchange reserves, widening of current account deficit and stalling an International Monetary Fund (IMF) loan facility. The country’s foreign exchange reserves are depleting swiftly due to the repayment of previous loans. The reserves had declined by $3.628 billion in just two weeks periods at a time when talks between Pakistan and IMF had halted due to the political situation of the country.
The stalling of an IMF loan facility is also putting pressure on local currency. Another reason behind currency depreciation is widening of current account deficit. The current account deficit had widened to $12.099 billion in first eight months (July to February) of the current fiscal year against a surplus of $994 million in the same period of last fiscal year.
APP adds: Similarly, the price of the euro depreciated by Rs4.76 and closed at Rs 200.45 against the previous day’s closing of Rs 205.11. The Japanese Yen lost four paisas to close at Rs1.48, whereas a decrease of Rs5.90 was witnessed in the exchange rate of British Pound, which was traded at Rs240.65 as compared to its last closing of Rs246.55. The exchange rates of Emirates Dirham and Saudi Riyal decreased by 93 paisas to close at Rs50.28 and Rs49.24 respectively.
