KARACHI: Pakistani capital markets and currency on Friday recouped some of the losses after a ruling by the country’s top court reduced days-long uncertainty that prevailed since Sunday, when Prime Minister Imran Khan moved to dissolve parliament, traders and analysts said.
The Supreme Court on Thursday ruled that Khan’s move to dissolve parliament was “unconstitutional” and ordered reinstatement of the National Assembly of Pakistan. The verdict is likely to result in ending Khan’s premiership of the South Asian country after a no-confidence vote on Saturday.
The constitutional crisis has threatened economic and social stability, with the Pakistani rupee hitting all-time lows against the dollar and the bourse witnessing bearish trends. On Thursday, the dollar closed at Rs188.13 in the interbank market and traded as high as Rs190.50 in the open market, prior to the apex court verdict.
However, the Pakistani currency on Friday witnessed a substantial improvement against the greenback by recovering Rs3.4 or 1.9 percent on a day-on-day (DoD) basis — the highest DoD recovery since April 17, 2020.
The greenback closed at Rs184.68 in the interbank market on Friday, according to the central bank data. It was trading at Rs188 in the open market.
“The combination of factors, the clarity on political front and the central bank’s move to increase the interest rate, have played a key role in the bullish close of the capital markets,” Samiullah Tariq, research director at Pakistan Kuwait Investment Company, told Arab News.
Pakistan’s central bank, which increased the key policy rate by 2.50 percent to 12.25 percent in an emergency move on Thursday, said the heightened domestic political uncertainty contributed to a 5-percent depreciation in the value of rupee and a sharp rise in domestic secondary market yields as well as Pakistan’s Eurobond yields.
The South Asian nation is also facing dwindling foreign exchange reserves, which decreased by $728 million to $11.32 billion due to debt repayment and government payments pertaining to settlement of an arbitration award relating to a mining project.
The stock market observed a bullish trend, with the benchmark KSE 100 index gaining 1.5 percent or 657.75 points to close at 44,445-point level.
“The session followed Supreme Court’s decision which put an end to political crisis to a large extent and rally in the banking sector on account of 250 bps hike in policy rate by the State Bank of Pakistan to 12.25 percent,” the Topline Securities brokerage firm said in its daily report.
Though the banking sector remained jubilant over the central bank’s decision to jack up the policy rate, business community expressed its resentment, saying the action was bound to negatively impact the economy.
“The point to be highlighted is that, the interest rates in corresponding countries such as India, Bangladesh, Sri Lanka and Bhutan are still in a range of 4 percent to 7.16 percent,” Ismail Suttar, president of Employers’ Federation of Pakistan (EFP), said in a statement issued on Friday.
“Yet a country such as Pakistan, that is experiencing socio-economic instability to a large extent has been driven to sudden rash decisions in the name of stability.”
Suttar said the State Bank of Pakistan (SBP) should keep in consideration that such actions, only by means of simple incomprehension, were bound to hit the economy hard.
“A simple deliberation on the matter, can lead us to realize the traditional system of increasing interest rates is resulting in the collapse of the economic structure in Pakistan and if no action is taken in due time, the country would be facing the recession upfront,” he warned.
Pakistani stocks, currency recover after top court ruling eases political uncertainty
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Pakistani stocks, currency recover after top court ruling eases political uncertainty
- Pakistani currency gains 1.9 percent in one of the highest recoveries against dollar on a day-on-day basis
- Traders, however, say central bank’s move to increase interest rate by 2.5 percent bound to hit the economy
Pakistan opposition ends protests, PTI forms ‘Imran Khan Release Force’ for jailed ex-PM
- Opposition alliance ends week-long protests over Khan’s health concerns
- Party announces nationwide membership drive for “peaceful” mobilization
ISLAMABAD: A Pakistani opposition alliance on Wednesday called off nationwide sit-ins held over jailed former prime minister Imran Khan’s health, while his Pakistan Tehreek-e-Insaf (PTI) party announced a new mobilization campaign, including the formation of an “Imran Khan Release Force.”
Pakistan has faced months of political confrontation between Khan’s party and the government since his arrest in 2023, with repeated protests, court battles and accusations by PTI that authorities are attempting to sideline its leader from politics, allegations the government denies.
Tensions have intensified in recent weeks after concerns emerged about Khan’s health in prison. Khan’s lawyer told Pakistan’s Supreme Court last week that the ex-cricketer had lost significant vision in his right eye while in custody, while a medical board said the swelling had reduced after treatment and his vision had improved. Since last week, the Tehreek-i-Tahafuz-i-Ayin-i-Pakistan (TTAP) opposition alliance has been holding a days-long sit-in at Parliament House over Khan’s health concerns.
“All sit-ins including the one at parliament have been called off,” Hussain Ahmad Yousafzai, a spokesperson for the alliance, told Arab News.
Separately, Khyber Pakhtunkhwa Chief Minister Muhammad Sohail Afridi told reporters the party was preparing for an organized political movement to demand their leader’s release.
“After continuous violations of court orders, an organized public struggle has now become inevitable,” Afridi said, announcing the creation of an “Imran Khan Release Force,” with membership open to youth across the country.
Afridi said the organization would include PTI’s student, youth, women, minority and professional wings and would conduct a “completely peaceful struggle,” adding that Khan himself would dissolve the body after his release.
He said membership cards would be issued within days and supporters would take oath in Peshawar after Eid, with a formal chain of command operating under leadership designated by Khan.
“This struggle is for real freedom, supremacy of the constitution and law, democracy and free media,” Afridi said.
Imran Khan, 73, a former cricket star who served as prime minister from 2018 to 2022, was removed from office in a parliamentary vote of no confidence that he says was orchestrated by political rivals with backing from the military. Both the government and armed forces deny the allegation.
Khan has been jailed since August 2023 after convictions he and his Pakistan Tehreek-e-Insaf party call politically motivated.
Broadcast outlets have been restricted from airing Khan’s name and speeches or even showing his image. Only a single court photograph has been publicly available since his imprisonment.
PTI swept to power in 2018 and retains a large support base across key provinces.
