ISLAMABAD: Amid political uncertainty surrounding government formation, the US dollar surged by a record 42 paisas against the Pakistani Rupee on Monday, reaching Rs279.80.
This rise in the dollar’s value coincided with a 455-point drop in the PSX-100 index, reflecting investor apprehension amidst the uncertain political landscape in the central government, Punjab, and Balochistan.
This development echoes a similar event last August when Pakistan witnessed its currency depreciate to over 325 rupees against the US dollar for the first time in history in the open market trading and 305 rupees in the inter-bank trading.
The devaluation of the local currency raises concerns about the potential inflationary impact on everyday consumer goods, exacerbating the existing burden of inflation on consumers.
Pakistan is currently in negotiations with a delegation from the International Monetary Fund (IMF) for the final tranche of a loan program.
In January, the IMF board approved a loan of approximately $700 million for Pakistan as part of a $3 billion bailout program.
This approval marked the completion of the IMF’s first review of the program, bringing the total disbursements under the Standby Arrangement (SBA) to about $1.9 billion.
Antoinette Sayeh, a deputy managing director at the IMF, noted tentative signs of economic activity picking up and external pressures easing in a statement regarding the loan disbursement.
