Pakistan rupee drops to record, bonds fall as Fitch cuts outlook

The rupee has tumbled to a succession of all-time lows in recent days as escalating political uncertainty has added to concern over the country's bailout deal with the IMF

Pakistan rupee
The rupee slid 3.2 per cent to close at 221.99 per dollar
Bloomberg
1 min read Last Updated : Jul 19 2022 | 10:31 PM IST
Pakistan’s rupee slumped to a fresh record low and the nation’s stocks and dollar-denominated bonds both fell after Fitch Ratings cut the country’s credit-rating outlook.
 
The rupee slid 3.2 per cent to close at 221.99 per dollar, while the benchmark stock index slid 2.4 per cent, and dollar bond due in April 2024 were indicated 14.2 cents lower, the biggest drop ever, at 53.15 per dollar. 

Fitch downgraded its outlook to negative Tuesday, citing concern over a “significant deterioration in Pakistan’s external liquidity position and financing conditions” and risks to the implementation of its International Monetary Fund program. 

“Political uncertainty is back again,” said Abdul Kadir Hussain, head of fixed-income asset management at Dubai-based Arqaam Capital. “USD/PKR goes higher, default risk rises, but also questions arise around the IMF deal. All of it is causing meltdown.” 

The rupee has tumbled to a succession of all-time lows in recent days as escalating political uncertainty has added to concern over the country’s bailout deal with the IMF, which it needs to avoid a default.

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Topics :Shehbaz SharifPakistan PML-NIMF

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