Market Extra: Pakistani rupee falls to record low as civil unrest compounds country’s problems

by | May 11, 2023 | Stock Market

The Pakistani rupee tumbled to a record low on Thursday as the military clashed with protesters in the country of more than 200 million people following the arrest of former prime minister, Imran Khan. The currency
PKRUSD,
-1.22

USDPKR,
+1.23%
traded as low as 297 to the U.S. dollar on Thursday, according to FactSet data. That marked its lowest level on record.

Pakistan has a history of military takeovers, political upheaval and social unrest. Khan is the seventh prime minister to be arrested since 1977.  Pakistan’s economy is also reeling from the worst floods in the country’s history in 2022.  Inflation hit an annual rate of 36.4% in April, with food price inflation at 48.1%. Economic growth is projected to be a dismal 0.5% this year. With about $77.5 billion in loan repayments due by June 2026, and little sign that the IMF will agree on a proposed lending program of $6.5bn, Pakistan remains in danger of defaulting, despite support from China. Now, these issues are being compounded by civil unrest following Khan’s arrest, said Jameel Ahmad, chief analyst at CompareBroker.io, in emailed commentary. “There is a risk of the country transitioning from what is already a crisis to a complete collapse should the unrest continue,” Ahmad said. “As an investor, you of course need to and want to take your capital out of such a volatile environment.” Khan was initia …

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