4.2 percent drop blamed largely on ongoing anti-government protests in Islamabad.
The Pakistani rupee has lost more than four percent against the dollar in a little over two weeks as an ongoing political crisis weighs on the economy, analysts said Monday.
The slide began when cricketer-turned-politician Imran Khan vowed to march on the capital to stage sit-ins aimed at toppling the government, which he accuses of rigging last year’s elections. The currency fell from 98.85 to the dollar on Aug. 8 to Rs. 103 to the dollar in the official interbank market on Monday—a slide of 4.2 percent.
Followers of Khan and another opposition leader, populist cleric Tahir-ul-Qadri, have been massed outside Parliament since Aug. 15 in a bid to force Prime Minister Nawaz Sharif to resign.
Pakistan was granted a $6.8 billion IMF bailout package last year to help the country achieve economic reforms, particularly in its troubled energy sector, but analysts warned gains the country has made are at risk. “The fears loom large that the current political crisis would lead to distracting from economic reforms under the IMF deal,” said Taha Khan, head of research at Taurus Securities. “If any change occurs in the government, it would raise concerns among IMF officials as to how the fund facility would go on.”
Imran Khan has vowed to default on the country’s international loans if he comes to power and has also called on citizens to stop paying taxes as part of a campaign of civil disobedience. Pakistan’s foreign exchange reserves stood at $7.8 billion before the IMF package was approved but later nearly doubled to $14.8 billion—though they have since slid to $13.9 billion according to the latest figures.
Ministers have said the political impasse is costing the economy millions of dollars a day due its impact on trade, the stock market and foreign investment. Banking sources said that the central State Bank of Pakistan’s head had convened a meeting of the treasury heads of the banks to discuss the falling rupee.