The Pakistani rupee (PKR) persisted in encountering downward pressure against the US dollar, with a recorded depreciation of 0.36 per cent. The day concluded with the rupee settling at Rs305.54, having incurred a loss of Rs1.09 in the interbank market, as reported by the State Bank of Pakistan (SBP).
In the preceding session, the rupee had concluded at a historic low of Rs304.45 against the US dollar in the inter-bank market.
IMF deviation risks dollar inflow halt
In a session of the Senate Standing Committee on Finance held on Wednesday and chaired by Senator Saleem Mandviwalla, interim Finance Minister Dr Shamshad Akhtar conveyed that the interim government’s financial leeway for subsidies was limited. However, she mentioned that a proposal was being deliberated upon to discontinue electricity provisions for privileged segments.
Dr Akhtar voiced apprehension that a deviation from the International Monetary Fund’s (IMF) stipulations could lead to a halt in dollar inflows, exacerbating the economic challenges facing the nation. She acknowledged that certain governmental actions had adversely affected the economic landscape. She specifically noted that the Federal Board of Revenue’s revenue collection was not meeting expectations while expenditures remained elevated.
The Senate committee expressed its reservations about the escalating exchange rate fluctuations, the unprecedented cost of electricity, and the 22 per cent interest rate, all of which collectively pose difficulties for existing businesses to sustain and prosper.
As a pivotal gauge of currency equilibrium, oil prices moderated on Thursday in response to data indicating a decline in China’s manufacturing activity. Additionally, investors were attentively awaiting the forthcoming US personal consumption expenditure report scheduled for later in the day.
KSE-100 crash
Moreover, the Pakistan Stock Exchange (PSX) remained firmly under the control of bears on Thursday as the benchmark index experienced a substantial drop of nearly 4 per cent, reflecting concerns about the country’s deteriorating economic situation.
Investors responded with a sense of panic to the escalating rupee-dollar parity, choosing to divest from shares due to apprehensions surrounding an imminent economic crisis.
Right from the commencement of trading, the KSE-100 index experienced a sharp decline, plummeting by over 1,700 points and breaching the 45,000 level. A prevailing negative sentiment among investors is preventing the index from making any headway into positive territory.