ISLAMABAD: The Pakistani rupee hit a new low against the US dollar as the currency nosedived Rs5.06 in a single day to Rs216.01 in the inter-bank market on Monday.
Similarly, the Pakistan Stock Exchange (PSX) followed suit and slumped 770 points to a one-year low below 41,000 points.
According to experts, capital markets came under renewed pressure following the emergence of fresh “political and economic uncertainties in Pakistan.”
The widespread win by the Pakistan Tehreek-e-Insaf (PTI) in by-elections in 20 constituencies of the Provincial Assembly in Punjab has altered the country’s political landscape once again.
Such uncertainties may mount pressure on the federal government as early general elections may be on the horizon.
Accordingly, the International Monetary Fund (IMF) may consider delaying the resumption of its $6 billion loan programme in wait for political clarity within the country.
On July 16, the fund announced that Pakistan would receive a $1.17 billion tranche in three to six weeks after the two reached a staff-level agreement.
However, as uncertainty persists and Pakistan’s foreign exchange reserves further deplete to a critically low level of $9.2 billion, a delay in the tranche poses a risk as the country verges on default.