Punjab by-poll results: PKR plunges to all-time low against US dollar in interbank market

KARACHI: The Pakistani rupee on Monday plunged to an all-time low of 215.20 against the US dollar in the interbank trade as the ruling PML-N's thrashing in the Punjab by-elections has triggered political uncertainty in the country.

Data released by the State Bank of Pakistan (SBP) showed that the local unit lost Rs4.25, or 1.97%, against the US dollar to close at an all-time low of Rs215.20.

It is the highest day-on-day depreciation after March 26, 2020.

On June 22, the rupee had closed at a record low of 211.93 against the greenback and since then the currency has remained volatile.

Pakistan-Kuwait Investment Company Head of Research Samiullah Tariq cited import payment pressure and political uncertainty as reason for the rupee's hit.

The analyst said that Sunday's by-election results gave clarity but the market is awaiting a strategy going forward.

"[The] market is looking for a direction, therefore investors are anticipating what would be the way forward. Will the coalition government announce early elections or not?" said Tariq.

On the other hand, Arif Habib Limited analyst Ahsan Mehanti said that the currency is depreciating but was hopeful that it would recover soon as all speculations are in favour of the local unit.

Mehnti believes that the funds that Pakistan will receive from the International Monetary Fund (IMF) following the staff-level agreement will give the local currency a "much-needed breather".

‘Time to stop wrong experiment’

Reacting to the sharp decline in the value of the Pakistani currency, PTI leader and former finance minister Asad Umar said that the political uncertainty is bleeding the economy and inflicting tremendous pain on the people.

Criticising the coalition government, Asad Umar, said that the time has come to stop this badly conceived, badly executed, totally gone wrong experiment.

Taking to Twitter, he said, “Pakistan cannot be made to suffer anymore for poor decisions.”