KARACHI: Pakistan’s national currency on Monday hit another all-time low when it closed at Rs305.64 against the US dollar while the country’s stock market witnessed bullish activity, a day after army chief General Syed Asim Munir met a delegation of Pakistani businesspersons to ease their fears amid economic uncertainty.
Pakistan’s rupee closed at Rs305.64 on Monday after trading ended, losing in value by 0.06 percent against the greenback compared to Rs305.47 at Friday’s closing. However, the currency appreciated in the open market to close at Rs328, according to the Exchange Companies Association of Pakistan (ECAP).
The development takes place a day after Munir met leading business figures at the Corps Commanders Headquarters in Lahore where he addressed their concerns. The army chief assured the business community of fostering “transparency” in the dollar exchange and interbank rates, according to a statement issued by Lahore Chamber of Commerce & Industry (LCCI).
Pakistani currency dealers said the meeting calmed Pakistan’s capital markets, bringing a positive change in investors’ sentiments.
“Overall sentiments have changed because the army chief has addressed all issues including smuggling, interbank and open markets, and big payment through foreign investment,” Zafar Sultan Paracha, ECAP general secretary, told Arab News.
“The army chief’s meeting with businessmen has brought calm in the otherwise jittery capital markets.”
The meeting took place at a time when Pakistan is grappling with a severe economic crisis, as its forex reserves dwindle and inflation hovers above 27 percent following frequent fuel and energy price hikes.
Paracha said the rupee, which had gone from Rs335 to Rs336 in the open trading market during the intraday trading on Friday, was expected to further depreciate. However, he said it remained relatively calm on Monday after the army chief shared his “clear vision for economic uplifting” with the business delegation.
“The currency was feared to further depreciate by Rs4-5 in the open market but the army chief’s meeting has provided a cushion and it is expected that the market would further improve in the coming days,” Paracha said.
He, however, said the demand for the greenback in the interbank market remains elevated.
On the other hand, bulls at the country’s bourse reacted to the army chief’s commitment to improve Pakistan’s economy and the phenomena of rising global oil prices, with the stock market gaining 394 points on Monday and the KSE100 index closing at the 45,707 level.
“The army chief’s assurance over transparency in the dollar exchange and interbank rates, bringing exchange companies into the tax net to ease off rupee instability and surging global crude oil prices, played a catalyst role in the bullish activity,” Ahsan Mehanti, CEO of the leading Pakistani business group Arif Habib Corporation, told Arab News.