Rupee drops further on escalating geopolitical tensions

KARACHI: The rupee posted more losses against the dollar on Thursday as the ongoing India-Pakistan conflict affected both the currency and the country’s equities.

The rupee closed at 281.51, slightly weaker than its previous close of 281.47 in the interbank market. The rupee also declined in the open market, trading at 283.24 per dollar, compared with 283.13 in the previous session.

Dealers said the local unit remained under pressure for the fifth consecutive session, pressured by signs of escalation in the India-Pakistan conflict after Islamabad said it shot down 25 drones from India in its airspace while India claimed to have “neutralised” Pakistan’s efforts to target military installations with drones and missiles.

The Pakistan Stock Exchange (PSX) saw an unprecedented meltdown as the KSE-100 index plummeted by 6,482 points, closing at 103,527, representing the most significant single-day drop in the index’s history.

According to reports, Finance Minister Muhammad Aurangzeb convened an emergency meeting on Wednesday to assess the current financial landscape in light of escalating geopolitical tensions following the recent belligerent Indian aggression.

“In a comprehensive and strategic discussion revolving around the situation and functioning of equity, debt, FX, and interbank markets, participants conducted a rapid risk assessment and evaluated the current threat perception with an emphasis on ensuring national financial stability and security,” the finance division said in a statement.