KARACHI: Pakistani currency on Tuesday extended declines following the withdrawal of hot money from country’s capital market and global fears triggered by coronavirus pandemic, analysts said.
Pakistani Rupee has lost its value by 1.4 percent since Monday in interbank market to Rs.158.25 against the US dollar by Tuesday afternoon trade as compared to Rs.155.50 of Monday opening. The currency has lost value by more than 2 percent since the March 2, 2020 currency dealers say.
Capital market analysts link the rupee depreciation with volatile global and local equity markets and the withdrawal of hot money from government papers which has registered $182.55 million outflows in first six days of March 2020, according to State Bank of Pakistan.
“The global volatility that has triggered outflows of foreign funds from risky investment avenues to risk free markets like USA and Japan is the possible reason for Pak rupee depreciation,” Samiullah Tariq, Director research at Arif Habib, told Arab News adding that “The funds are moving out from Pakistan, India and other regional markets for save havens.”
The Special Convertible Rupee Accounts (SCRA) maintained by Pakistan’s central bank shows that the south Asian country’s capital market attracted $4.105 billion during July 2019 to March 06, 2020. The majority or 83 percent of the foreign fund inflows were attracted in short-term treasury bills which offer as much as 13.38 percent returns.
Currency dealers say they witnessed panic buying of greenback following Monday’s equity market crash that dropped 2300 points and triggered panic selling.
“The foreign investors sold rupee in the interbank market as they wanted to exchange with dollars. The panic buying and selling upset the exchange rates in the currency market,” Malik Bostan, President, Forex Association of Pakistan, told Arab News.
“After Coronavirus outbreak the investors are offloading their positions from the equity market and they want to convert into dollars that is putting pressure on the Pak rupee,” he added.
However, dealers say the buying activity in the open market is confined to only 2 percent that comes from those traveling abroad while 98 percent exchange goes to banks.
“Our daily buying and selling stands at $100-150 million while we are providing around $300 million to banks,” Bostan noted.
Pakistani Rupee drops against dollar as panic buying goes up
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Pakistani Rupee drops against dollar as panic buying goes up
- Foreign investors have withdrawn $182 million from Pakistan capital market, central bank data shows
- Global volatility has triggered outflows of foreign funds from risky investment avenues to risk free markets
Pakistan says responding to Afghan ‘offensive operations’ after border fire as tensions escalate
- Afghan Taliban spokesperson says “large-scale offensive operations” launched against Pakistani military bases
- Pakistan says Afghan forces opened “unprovoked” fire across multiple sectors along shared border
ISLAMABAD: Afghanistan’s Taliban authorities said on Thursday they had launched “large-scale offensive operations” against Pakistani military bases and installations, prompting Pakistan to say its forces were responding to what it described as unprovoked fire along the shared border.
The escalation follows Islamabad’s weekend airstrikes targeting what it said were Tehreek-e-Taliban Pakistan (TTP) and Daesh militant camps inside Afghanistan in response to a wave of recent bombings and attacks in Pakistan. Islamabad said the strikes killed over 100 militants, while Kabul said dozens of civilians were killed and condemned the attacks as a violation of its sovereignty.
In a post on social media platform X, Afghan government spokesperson Zabihullah Mujahid said Afghanistan had launched “large-scale offensive operations” in response to repeated violations by the Pakistani military.
Pakistan’s Ministry of Information said Afghan forces had initiated hostilities along multiple points of the frontier.
“Afghan Taliban regime unprovoked action along the Pakistan–Afghanistan border given an immediate, and effective response,” the ministry said in a statement.
The statement said Pakistani forces were targeting Taliban positions in the Chitral, Khyber, Mohmand, Kurram and Bajaur sectors, claiming heavy Afghan casualties and the destruction of multiple posts and equipment. It added that Pakistan would take all necessary measures to safeguard its territorial integrity and the security of its citizens.
Separately, security officials said Pakistani forces had carried out counterattacks in several border sectors.
“Pakistan’s security forces are giving a befitting reply to the unprovoked Afghan aggression with full force,” a security official said, declining to be named.
“The Pakistani security forces’ counter-attack destroyed Taliban’s hideouts and the Khawarij fled,” they added, referring to TTP militants.
The claims from both sides could not be independently verified.
Cross-border violence has intensified in recent weeks, with Pakistan blaming a surge in suicide bombings and militant attacks on militants it says are based in Afghanistan. Kabul denies providing safe havens to anti-Pakistan militant groups.
The clashes mark the third major escalation between the neighbors in less than a year. Similar Pakistani strikes last year triggered weeklong clashes before Qatar, Türkiye and other regional actors mediated a ceasefire in October.
The 2,600-kilometer (1,600-mile) frontier, a key trade and transit corridor linking Pakistan to landlocked Afghanistan and onward to Central Asia, has faced repeated closures amid tensions, disrupting commerce and humanitarian movement. Trade between the two nations has remained closed since October 2025.
