ISLAMABAD: Pakistan’s economic indicators suffered a massive hit on the second consecutive day on Tuesday as the stock market saw a bloodbath in the backdrop of a historic fall in rupee which closed at Rs222 against the greenback.
According to the details, the rupee shattered all previous records on Tuesday, falling to a new low of 224 against the dollar in afternoon interbank trade, before closing at 221.99.
According to State Bank of Pakistan (SBP), the local currency fell by Rs6.79 in the interbank market, depreciating by 3.06% against yesterday’s close of Rs215.20.
Meanwhile, intense selling pressure was witnessed at the Pakistan Stock Exchange (PSX) on Tuesday as the benchmark KSE-100 index lost more than 900 points.
The market’s decline coincided with the rupee falling to an all time low against the dollar for a second consecutive day.
Initially according to the PSX website, the KSE-100 Index opened at 41,367.11 points and went up 176 points. However, after 10:30am the bears took control and the market began sliding. At around 3:25pm, the index hit 40,313.78 points — a decline of 1,053.33 points or 2.55 per cent. The index closed at 40,389.07 points, down 978.04 points or 2.36 per cent.
It is pertinent to note that yesterday the benchmark KSE-100 Index dropped into the red zone after shedding over 700 points during the first few hours of intraday trade, with banking, cement, and fertilizer as the top negative contributors on the bourse at the time.
Mettis Global Director Saad Bin Naseer said the rupee was seeing a decline due to “panic buying [of the dollar] by banks in the interbank market”.
He said that “panic is setting in the financial markets following fears of change in [the] government in Punjab and Centre” after the by-polls on the province’s 20 seats.
Alpha Beta Core Chief Executive Officer Khurram Schehzad, however, pointed out that to factors beyond the domestic political and economic situation.
He attributed the rupee’s rapid decline to Fitch’s downgrading and the global trend. “The dollar is getting stronger in the global market against almost all the world currencies. The Pakistani rupee is not an exception,” he said.
It may be mentioned here that this was the highest day-on-day depreciation after June 26, 2019 when the currency fell by Rs6.80.
Meanwhile, the local currency’s shock slide within a matter of a few hours drew sharp criticism from various corners.
Former prime minister and PTI Chairman Imran Khan said that when he was ousted via a vote of no confidence, the dollar stood at Rs178. “Today it is Rs224 and in free fall despite IMF agreement. The economic meltdown shows Sharifs never had any expertise in running economy or administration. Their only expertise is looting, money laundering and getting NROs,” he added.
“We need a full time SBP governor and [Minister for Finance] Miftah Ismail to refocus on this issue. Free fall of rupee guarantees economic disaster and free fall of government too,” Journalist Mohammad Malick said.
