KARACHI: The rupee remained stable against the dollar at 105.25/105.45 in the inter-bank market on Monday compared to Friday’s close of 105.25/105.45.
The currency market has fluctuated regularly in recent months with hefty rises and falls on some occasions. In the long run, however, the rupee has stood firm after experiencing extensive volatility, when it weakened from around Rs98 to a dollar to above Rs103 in the wake of political impasse over alleged election rigging.The central bank has imposed 100% cash margin on the import of certain consumer goods to restrict the demand for US dollars. The rupee has been one of the best performing currencies in Asia for over three years despite the dollar’s sharp appreciation against other currencies.
However, the International Monetary Fund has repeatedly said that Pakistan’s rupee is overvalued by 5-20%. According to analysts, the artificial support for the rupee has adversely affected Pakistan’s exports.
The Pakistan Stock Exchange (PSX) saw another merciless bloodshed as the benchmark went down to 993 points in intra-day trading, going as low as 41025.28 during the day. The benchmark KSE-100 index lost -903.12 points, or 2.15 per cent, by the close of the trading session to reach 41115.78 points.
The market opened in green and went up to intraday high of just 25 points and quickly went down in the negative territory in the first half hour over the Political uncertainty. Coupled with lack of decision-making, has put investors at unease over the past few weeks.
The indictment of Finance Minister Ishaq Dar and the re-election of Nawaz Sharif as Pakistan Muslim League-Nawaz (PML-N) president has compounded worries that there is a political as well as an economic turmoil ahead for the country.
Over the political instability, investors were happy to sit out and watch the bears put on a show at the Pakistan Stock Exchange.
Market suggested that Nawaz Sharif’s comeback after President Mamnoon Hussain signed the controversial Election Act 2017 into law may have paved way for his political future which created political doubts in investors mind who were already in selling pressure.