Owing to foreign payment pressure and political uncertainty in Pakistan, and in the world, the rupee weakened 4% on Friday, with the inter-bank rate becoming Rs110 to the US dollar at one point of the currencies’ trade.
The inter-bank opened the day at Rs105.50 and touched Rs110 during the wee hours. It was trading at Rs108.50-Rs109 per US dollar 45-minutes before Friday break at 12.30pm.
“We are observing the situation… and will take action if needed,” spokesperson Abid Qamar of State Bank of Pakistan told to The Express Tribune on the phone.
The market is moving on its own fundamentals, there might be some payment pressure as well. If the situation doesn’t calm down, the central bank will take necessary action by the evening, he added.
The open market strictly followed movement in the inter-bank throughout its first session on Friday; the inter-bank market will resume at approximately 2:30pm.
President Forex Association of Pakistan Malik Bostan said there was no panic in the open market. “People have adopted the wait and see strategy following heavy losses sustained in July in a similar situation,” he said.
“It seems the International Monetary Fund (IMF) has mounted pressure to devalue the rupee,” he said, adding, “if this is the situation the government must take the nation into confidence.”
With the political canvas changing everyday, including Pakistan Peoples Party (PPP) joining hands with the Pakistan Awami Tehreek (PAT) to demand the resignation of Punjab Chief Minister Shehbaz Sharif, or with Jamaat-e-Islami (JI) planning a street protest against US President Donald Trump’s decision to recognise Jerusalem as Israel’s capital — political uncertainty is sure to have its affect on the market.
Earlier in July 2017, the rupee lost 3.19% to Rs108.25 per US dollar for one day only in the inter-bank, but intervention by the then Finance Minister Ishaq Dar helped it recover to Rs105.70 per US dollar the next day.