KARACHI: Afghanistan’s emerging situation and burgeoning import bills are keeping Pakistan’s currency under pressure which has depreciated by more than 10 percent in the last four months, said traders and analysts on Friday.
The Pak rupee did make some progress in the last two days and closed at Rs166.91 on Friday. Official data reveal the currency was hovering around the same level last year on July 29 when the country was witnessing the peak of the coronavirus pandemic.
“The situation in Afghanistan is keeping the national currency under tremendous pressure,” said Khurram Schehzad of Alpha Beta Core, a financial advisory platform. “Greenback is in a massive demand in Afghanistan since the withdrawal of the international forces.”
Local currency dealers agree with the assessment, saying about $2 million have been flowing out of the country to Afghanistan on a daily basis since the fall of Kabul.
“Afghans with dual nationality have been buying 1.5 to 2 million dollars on a daily basis from open market and taking it to their country since the American currency is now in a short supply over there,” Malik Bostan, Chairman Forex Association of Pakistan, told Arab News. “The inflow of dollars has stopped in the neighboring country, and Afghanistan's entire banking system has collapsed.”
“Previously, Pakistan received $5 million to $7 million from Afghanistan every day since currency was cheap over there and salary payments were mostly made in dollars,” he added.
Apart from the situation in Afghanistan, the Pakistani rupee is also weakening against greenback due to the country’s growing trade deficit.
Pakistan has recorded the highest trade deficit in August when its import bill stood at $6.3 billion and its export revenue was $2.25 billion, causing a trade deficit of $4.06 billion. Previously, the country had recorded its highest deficit of $3.77 billion in June 2018.
“The situation indicates that dollar is in a short supply to meet the demand of importers which is exerts a significant pressure on the national currency,” Samiullah Tariq, director research at the Pakistan-Kuwait Investment, told Arab News.
“In July, the current account deficit was $773 million, but it seems that it is going to be higher for August, though the remittance figures have yet not been released,” he added.
The State Bank of Pakistan reported on Thursday the country had $27.22 billion in foreign reserves. The country’s forex position was also strengthened since it received $2.75 billion from the International Monetary Fund (IMF) last week. However, this build-up has also failed to cool the currency market where the Pakistani rupee remains under pressure.
“The policy of the government or the central bank seems to be that it is not going to use its forex reserves to defend the rupee,” Tariq commented.
US withdrawal from Afghanistan, high import bill weaken Pakistan’s currency — traders
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US withdrawal from Afghanistan, high import bill weaken Pakistan’s currency — traders
- Local currency dealers say nearly $2 million have been flowing to Afghanistan from Pakistan on a daily basis since the international military pullout
- The Pakistani currency has lost nearly 10 percent of its value against the US dollar in the last four months
Curfew extended in Gilgit-Baltistan, probe ordered after deadly Khamenei protests
- At least 15 people were killed in clashes with law enforcement agencies over the weekend in Gilgit-Baltistan
- Government also announces a de-weaponization campaign, crackdown on hate speech and cybercrime in region
ISLAMABAD: The government in Pakistan’s Gilgit-Baltistan (GB) region on Tuesday extended a curfew in Gilgit district and ordered a judicial probe into violent protests over the killing of Iranian Supreme Leader Ali Khamenei in US-Israeli strikes last week, an official said.
At least 15 people were killed in clashes with law enforcement agencies over the weekend in GB, where protesters torched and vandalized several buildings, including United Nations regional offices, an army-run school, software technology park and a local charity building.
The violence prompted regional authorities to impose curfew in Gilgit and Skardu districts on March 2-4 as officials urged people to stay indoors and cooperate with law enforcers, amid widespread anger in Pakistan, particularly among members of the Shiite minority, over Khamenei’s killing.
On Tuesday, the GB government convened to review the situation and announced the extension of curfew in Gilgit among a number of security measures as well as ordered the establishment of a judicial commission to investigate the weekend violence in the region.
“The government has made it clear that the law will strictly take its course against elements involved in vandalism at government institutions, private properties and incidents of vandalism in Gilgit and Skardu and no kind of mischief will be tolerated,” Shabbir Mir, a GB government spokesperson, said in a statement.
“In view of the security situation, curfew will remain in force in Gilgit, while the decision to extend the curfew in Skardu will be taken keeping the ground realities and the changing situation in view.”
The statement did not specify how long the curfew will remain in place in Gilgit.
Besides the formation of the judicial commission to investigate the violent clashes, the government also decided to launch a large-scale de-weaponization campaign in the entire Gilgit district, for which relevant institutions have been directed to immediately complete all necessary arrangements, according to Mir.
In addition, a crackdown has been ordered on hate speech, spread of fake news and cybercrime.
“The aim of these decisions is to ensure the rule of law, protect the lives and property of citizens and crack down on miscreants,” he said. “Approval has also been given to immediately survey the affected infrastructure and start their restoration work on priority basis.”
Demonstrators in Pakistan’s southern port city of Karachi also stormed the US Consulate on Sunday, smashing windows and attempting to burn the building. Police responded with batons, tear gas, and gunfire, leaving 10 people dead and more than 50 injured.
Pakistani authorities have since beefed up security at US diplomatic missions across the country, including around the US consulate building in Peshawar, to avoid any further violence.
