Pakistan is fast moving towards a total financial meltdown as the rupee hit another record law against the US dollar while the stock market shed at least 1,500 points in two days after Fitch Ratings downgraded the countrys credit rating from 'stable' to 'negative'.
The growing political temperature has also created a non-time bound political uncertainty in the country.
Fitch Ratings downgrading Pakistan's economic growth came with reference to Pakistan's agreement with the International Monetary Fund (IMF) to impose tough measures to increase tax base in the country, aimed at the revival of the Extended Funding Facility (EFF) programme.
Fitch has maintained that while it assumes that Pakistan has reached a staff-level agreement with the IMF, implementation of the programme will be very difficult amid the persisting and prevailing political situation in the country, uncertainty over the political stability of the ruling government and its capability to implement tough measures, which the government has agreed with the IMF.
The Fitch downgrade and the prevailing political uncertainty have hit the Pakistani rupee hard, as it slumped to Rs 224 against the US dollar, while the Pakistan Stock Exchange shed at least 1,500 points in two days of trading.
"The recent movement in rupee is the feature of a market-determined exchange rate system. Under this system, the current account position, relevant news items, and domestic uncertainty together determine daily currency fluctuations," maintained the State Bank of Pakistan.
"The recent rupee depreciation against the US dollar is also in large part a global phenomenon. Globally, the US dollar has surged by 12 per cent in the last six months to a 20-year high, as the US Fed has aggressively raised interest rates in response to rising inflation," it added.
On the other hand, brokerage houses maintained that bears took charge at the Pakistan Stock Exchange (PSX) as the bloodbath continued.
"Selling momentum continued across the board due to political unrest and rupee devaluation against the US dollar," said brokerage house Asif Habib.
With no sight of any settlement on the political ground between the ruling government of Prime Minister Shehbaz Sharif and his arch political rival Imran Khan, troubles for Pakistan are far from over.
--IANS
hamza/arm
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
You’ve hit your limit of {{free_limit}} free articles this month.
Subscribe now for unlimited access.
Already subscribed? Log in
Subscribe to read the full story →
Quarterly Starter
₹900
3 Months
₹300/Month
Smart Essential
₹2,700
1 Year
₹225/Month
Super Saver
₹3,900
2 Years
₹162/Month
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Access to Exclusive Premium Stories Online
Over 30 behind the paywall stories daily, handpicked by our editors for subscribers


Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share


Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor


Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements


Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app