Pakistani Finance Minister Miftah Ismail said the ongoing domestic political turmoil has led to the depreciation of the country’s currency. The Pakistani rupee hit a new low of more than 224 against a US dollar.
Ismail told Reuters that the rupee downturn is not due to economic fundamentals. ”The panic is primarily due to political turmoil, which will subside in a few days," he said.
Though Islamabad’s talks with IMF for a bailout package has concluded with the multilateral agency agreeing to provide $1.17 billion under the extended fund facility (EFF), the delay in disbursal has led to concerns.
The political uncertainty has deepened after Shehbaz Sharif-led ruling PML-N suffered defeat in the Punjab by-elections at the hands of PTI.
Former prime minister Imran Khan led Pakistan Tehreek-e-Insaaf won 15 out of 20 seats in the Punjab assembly by-elections. This has only strengthened Khan and his party. Punjab, the largest and most populous province in Pakistan, has typically supported PML-N led by the Sharifs.
“The result in Punjab is a major blow for current Prime Minister Shehbaz Sharif, who leads the PML-N. His already weak coalition government's fate now hangs by a thread,” BBC said in a report.
Amid this growing uncertainty, Fitch Ratings revised Pakistan's outlook to ‘negative’ from ‘stable’.
The Pakistani rupee has lost almost 28 per cent this year. On January 1, the rupee was pegged at just over 173 against the dollar.
