The rupee plunged to an all-time low against the dollar after losing Rs1.14, closing at Rs185.2 in the interbank market on Tuesday.
On Sunday, National Assembly (NA) Deputy Speaker Qasim Suri prorogued the no-confidence motion against Prime Minister Imran Khan after which President Arif Alvi dissolved the NA on the prime minister’s advice.
The legality of these moves is currently being debated in the Supreme Court, which is expected to issue an order soon.
The impact of the situation put pressure on the rupee after which it breached the Rs185-mark for the first time ever earlier today. Mettis Global — a web-based financial data and analytics portal — said that the rupee had lost its worth by more than 3 per cent or Rs5.4 since March 8, when the no-confidence motion was submitted in the NA.
General secretary of the Exchange Companies Association of Pakistan, Zafar Paracha, called today a “black day in the history of Pakistan”.
“All exchange companies are selling 99pc of their foreign reserves in the interbank,” he said. “The market is suffering because of the worsening political situation.”
Paracha added that the news regarding the International Monetary Fund (IMF) Programme further came as a blow.
Yesterday, IMF’s resident representative in Islamabad Esther Perez Ruiz said that the fund would engage with the new government once it was formed.
“The Fund looks forward to continue its support to Pakistan and, once a new government is formed, we will engage on policies to promote macroeconomic stability, and inquire about intentions vis-a-vis programme engagement,” she said, adding “There is no concept of suspension within IMF programmes.”
Meanwhile, Paracha said that the market had pinned hopes on an early verdict by the Supreme Court.
Malik Bostan, chairman of Pakistan Forex Association, also urged the apex court to pass an early decision to prevent further damage to the economy.