Amid the continued sinking of the rupee in the interbank market to an all-time low of Rs 225 against the dollar, Finance Minister Miftah Ismail has said that the on-going political instability is the reason behind the current economic crisis.
Speaking to Reuters Ismail said, "The panic in the market is primarily due to political turmoil, which will subside in a few days." He further said that he expected pressure on the rupee to fall in the upcoming days.
According to analysts, the decline of the rupee is due to the lack of economic guidance from the federal government during a period of political instability, as well as the lack of intervention from the State Bank of Pakistan (SBP), which has been without a governor for 75 days.
In addition, three of the five remaining board members of the SBP are retiring on Friday, which would leave behind only two board members. Board meetings require the presence of at least four board members, which means the SBP board will become dysfunctional.
According to the Forex Association of Pakistan, the rupee was being traded at Rs 225 at 10:30 AM, which was a decline of Rs 3.01 or 1.3%, from yesterday's close of Rs 221.99.
According to Dawn, Exchange Companies Association of Pakistan General Secretary Zafar Paracha held the government and the SBP responsible for not taking measures to stop the rupee's decline.
"There is an upward trend in the dollar since the market opened today. Yesterday, the SBP stated that it had left the rupee free and the rate was being determined by market forces," he said.
Speaking to Reuters Ismail said, "The panic in the market is primarily due to political turmoil, which will subside in a few days." He further said that he expected pressure on the rupee to fall in the upcoming days.
According to analysts, the decline of the rupee is due to the lack of economic guidance from the federal government during a period of political instability, as well as the lack of intervention from the State Bank of Pakistan (SBP), which has been without a governor for 75 days.
In addition, three of the five remaining board members of the SBP are retiring on Friday, which would leave behind only two board members. Board meetings require the presence of at least four board members, which means the SBP board will become dysfunctional.
According to the Forex Association of Pakistan, the rupee was being traded at Rs 225 at 10:30 AM, which was a decline of Rs 3.01 or 1.3%, from yesterday's close of Rs 221.99.
According to Dawn, Exchange Companies Association of Pakistan General Secretary Zafar Paracha held the government and the SBP responsible for not taking measures to stop the rupee's decline.
"There is an upward trend in the dollar since the market opened today. Yesterday, the SBP stated that it had left the rupee free and the rate was being determined by market forces," he said.