KARACHI: The rupee is likely to remain stable in the coming week provided the coalition government follows its policy of keeping a tight watch on financial institutions and curbs any manipulation in the currency markets, JEE News reported on Sunday.
The local unit broke all records during the outgoing week and fell to an all-time low of 298.93 in the interbank market on Thursday.
However, the rupee saw an improvement in the interbank market as the local currency made its biggest single-day recovery in absolute terms – it closed up 13.85 intraday at 285.08 on Friday.
The apparent reason for the rupee’s unusually low level against the greenback was the political situation, which took a turn for the worse following the arrest of former prime minister Imran Khan in an alleged corruption case from the court premises on Tuesday (May 9).
After Khan’s arrest, the country was engulfed in violent protests as supporters of the Pakistan Tehreek-e-Insaf (PTI) chief took to the streets and resorted to violence, leading to a sharp fall in the value of the rupee, according to analysts. happened Compared to the dollar, the political crisis has also had an impact on the economic front.
After Khan’s arrest, the rupee depreciated so much that it touched Rs 298.93, the highest level in the country’s history.
On the other hand, currency dealers pointed out that bad political situation also played a role in the sharp depreciation of the rupee, but market players also took advantage of the situation and speculated to earn massively from foreign currency trading. resorted to .
Traders said the government acted to curb such trading, leading to the rupee’s biggest one-day recovery, even though the political situation has not improved and remains very hostile.
Secretary General Exchange Companies Association of Pakistan (ECAP) Zafar Paracha said, “It was the government’s action, which brought down the value of the dollar, otherwise the political uncertainty is still there and will not end in the near future.” There are no traces.”
He said that the sharp depreciation of the rupee on Wednesday and Thursday was manipulated to trigger government action and then the market saw the dollar fall back to its original level.
Paracha predicted that the dollar-rupee parity could stabilize in the coming week if the government keeps its checks on the market strong to discourage manipulators from taking advantage of the country’s volatile political situation.
He believed that the rupee-dollar parity could remain stable even if the government succeeded in keeping track of the rupee’s appreciation.
Pracha said that the political crisis in the country is not over yet, so if the rupee-dollar parity is linked to it, it will definitely go up. However, this is associated with “speculative trading” and if the government manages to keep watch, the parity may stabilize and the rupee may appreciate slightly.
