Pakistan finance minister blames political turmoil for rapid depreciation in country’s currency

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<strong>Pakistani Finance Minister Miftah Ismail said the ongoing domestic political turmoil has led to the depreciation of the country’s currency. The Pakistani rupee hit a new low of more than 224 against a US dollar.</strong></p>
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Ismail told <a href="https://www.reuters.com/markets/rates-bonds/panic-pakistani-markets-rupee-slides-further-against-us-dollar-2022-07-20/" rel="nofollow">Reuters</a> that the rupee downturn is not due to economic fundamentals. ”The panic is primarily due to political turmoil, which will subside in a few days," he said.</p>
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Though Islamabad’s talks with IMF for a bailout package has concluded with the multilateral agency agreeing to provide $1.17 billion under the extended fund facility (EFF), the delay in disbursal has led to concerns.</p>
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The political uncertainty has deepened after Shehbaz Sharif-led ruling PML-N suffered defeat in the Punjab by-elections at the hands of PTI.</p>
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Former prime minister Imran Khan led Pakistan Tehreek-e-Insaaf won 15 out of 20 seats in the Punjab assembly by-elections. This has only strengthened Khan and his party. Punjab, the largest and most populous province in Pakistan, has typically supported PML-N led by the Sharifs.</p>
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“The result in Punjab is a major blow for current Prime Minister Shehbaz Sharif, who leads the PML-N. His already weak coalition government's fate now hangs by a thread,” <a href="https://www.bbc.com/news/world-asia-62206374" rel="nofollow">BBC</a> said in a report.</p>
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Amid this growing uncertainty, Fitch Ratings revised Pakistan's outlook to ‘negative’ from ‘stable’.</p>
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The Pakistani rupee has lost almost 28 per cent this year. On January 1, the rupee was pegged at just over 173 against the dollar.</p>
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<strong>Also read: <a href="https://www.indianarrative.com/economy-news/imf-agrees-to-revive-stalled-bailout-package-but-will-it-enough-to-revive-pakistan-s-sick-economy-184059.html">IMF agrees to revive stalled bailout package but will it be enough to revive Pakistan’s sick economy?</a></strong></p>