Rupee bears the brunt of political clamour

Hits new 7-week low at Rs225.82 against the dollar

KARACHI:

The ongoing political drama is putting too much pressure on the Pakistani rupee against the US dollar, while the smuggling of dollars to Afghanistan and the Russia- Ukraine conflict have added to the currency’s woes.

Addressing a press conference on Monday, Exchange Companies Association of Pakistan (ECAP) President Malik Bostan said, “Pakistani politicians’ differences are deepening the economic crisis.”

The rupee maintained a downtick on the fifth consecutive working day, losing by a fresh 0.08% (or Rs0.18) to a new seven-week low at Rs225.82 against the US dollar in the interbank market on Monday.

Cumulatively in the past six-weeks, the rupee has depreciated by a net 3.69% (or Rs8.03) to Rs225.82, compared to the then high at Rs217.79 on October 11, 2022, according to data from the State Bank of Pakistan (SBP).

On April 8, 2022, two days before the government of former prime minister Imran Khan was ousted, the local currency stood at Rs186.68 and since then, political crisis has continued to weaken the domestic economy.

Bostan said that the illegal hawala-hundi operators have been smuggling almost $2 billion from Pakistan to Afghanistan through different means since the US forces evacuated the land-lock state in August 2021.

The reserves have dropped to a nine-year low at $6.11 billion at present, compared to over $20 billion at the time the US forces exited Afghanistan in August 2021.