Rupee falls against US dollar as shares fall over 1,200 points

The rupee fell by Rs1.09 against the dollar in the interbank market on Thursday, according to the State Bank of Pakistan. The foreign currency closed at Rs304.45 in intraday trade.

The local currency has been falling since the caretaker setup came to power. But many experts have blamed the previous government for such a fall in the rupee’s value.

Meanwhile, the benchmark 100-index shed over 1,200 points on Thursday.

The rupee closed at Rs304.45 after shedding Rs1.4 on Wednesday, according to the State Bank of Pakistan.

“It would be dishonest to blame the caretaker setup for worsening economic crisis in Pakistan,” Uzair Younus, who is the director of the Pakistan Initiative at the Atlantic Council’s South Asia Center, wrote on X.

He blamed former finance minister Ishaq Dar’s economic policies for the fall in rupee’s value.

“At the end of the day, the buck stopped with Shehbaz Sharif and the PDM coalition, which allowed Dar to run amok,” he said.

The former coalition government assured the International Monetary Fund of withdrawing the circular on prioritisation in providing foreign exchange for certain types of imports introduced in December 2022.

According to Najam Ali, the political governments kept a lid on economic problems and took short-term measures to hide the issues since they lacked the will to implement painful reforms.

“In last three weeks, the lid is being gradually lifted and the pot is overflowing with decades of mis-governance. Why is it a surprise? Hold new elections and the new govt will put the lid back,” he wrote on social media.

In another social media post, he stressed that Pakistan’s economy would not improve till the government understood and redress the causes of its downfall.

“Our problems are simple: we import more than we export; we spend more than we earn,” he said, “over the last three decades we relied on debt financing for both CAD and fiscal deficit. We now find ourselves in a situation where such financing is no longer available or feasible.”

He called for improving the forex and fiscal imbalances that required tough decisions.

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