https://www.reuters.com/markets/rates-b ... 022-07-20/
Pakistan finmin says rupee slide not due to economic fundamentals
Syed Raza Hassan, July 20, 2022
KARACHI, Pakistan (Reuters) - Pakistan's finance minister on Wednesday blamed the rupee's slide on political turmoil, saying he expects market jitters over the currency's sharp decline to subside soon.
The South Asian country recently passed through another bout of political instability, with the government of Prime Minister Shehbaz Sharif taking over from ousted premier Imran Khan in April.
"The rupee downturn is not due to economic fundamentals," Finance Minister Miftah Ismail told Reuters. "The panic is primarily due to political turmoil, which will subside in a few days."
Pakistan is also suffering from fast depleting foreign reserves, a declining currency and widening fiscal and current account deficits, with the rupee losing 18% of its value since Dec. 21.
The rupee fell 2% on Monday and 3% on Tuesday despite last week's staff level agreement reached with the International Monetary Fund that would pave the way for a disbursement of $1.17 billion under resumed payments of a bailout package.
Pakistan is also suffering from fast depleting foreign reserves, a declining currency and widening fiscal and current account deficits, with the rupee losing 18% of its value since Dec. 21.
The rupee fell 2% on Monday and 3% on Tuesday despite last week's staff level agreement reached with the International Monetary Fund that would pave the way for a disbursement of $1.17 billion under resumed payments of a bailout package.
On Wednesday morning, the rupee was trading at 225 per dollar, having ended Tuesday at 221.99 after Fitch ratings agency revised its outlook for Pakistan sovereign debt from stable to negative - though it affirmed Long-Term Foreign-Currency and Issuer Default Rating at "B-".
"There is panic in the market, I fear it (the rupee) will go down further," Zafar Paracha, secretary general of a foreign exchange association, the Exchange Companies of Pakistan, told Reuters.
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Gautam