Despite the progress on IMF program as it reaches the staff-level agreement, market is still being the victim of uncertainty due to political upheavals. During intra day trading on Monday, the rupee fell to 215 after a depreciation of nearly 1.9% against the US dollar in the inter-bank market. Latest political happening of Punjab by-polls caused turmoil in the market.
Read more: SBP official explains “Why is the Rupee always depreciating?”
According to forex dealers, the dollar gained value by Rs4.30 against the rupee in the interbank and traded at Rs215.25. In the open market, the greenback traded between Rs216 and Rs217.
According to analysts, the Pakistan Tehreek-e-Insaf (PTI) success in Sunday’s polls prompted calls for general elections. In the by-elections for the 20 constituencies of the Punjab Assembly, unofficial results confirmed PTI victory on a majority of the seats on Sunday.
On Friday, the rupee had closed at 210.95, a depreciation of 0.55% or Rs1.15, as stress piled up because of import payments and the strength of US dollar.
Read more: Pakistani Rupee dives into the sea
Despite of IMF’s announcement that it had reached a staff-level agreement with Pakistan on Thursday, the rupee depreciated 1.4% as the US dollar’s resurgence and worsening economic conditions piled pressure on the local currency.
The rupee lost value in two of the three sessions, rebounding only little on Thursday – the day the IMF staff-level agreement was revealed – as investors bet on the US Federal Reserve raising interest rates to combat rising inflation, further strengthening the dollar against the rupee.
Furthermore, Pakistan’s foreign exchange reserves fell further, with analysts claiming that pending import payments were also contributing to the rupee’s decline.