From Zeeshan Mirza
KARACHI: The Pakistani rupee continued to fall against the dollar for the third consecutive session on Friday, losing 97 paise in the interbank market.
The local currency closed at Rs222.47 per dollar, a depreciation of 0.44 per cent from Thursday’s close of Rs221.5, according to the State Bank of Pakistan.
Since the start of this fiscal year, the PKR’s value has declined by Rs16.64 or 7.52pc, according to data compiled by Mettis Global.
The risk of sovereign default hit its highest level since November 2009 early this week. The country’s five-year credit default swap (CDS) — a type of insurance against the risk of sovereign default — increased by more than three percentage points on Oct 25 to reach 52.8pc, a 13-year high.
The rising CDS level is reflective of investors’ dwindling confidence in Pakistan’s ability to pay back its international loans.
FAP Chairman Malik Bostan also attributed the rupee’s fall to the long march and political instability. He said importers were buying the greenback out of fear that the dollar’s rate would go up while banks were also purchasing it at higher rates, which was pushing up prices.
In addition, exporters were holding their proceeds abroad on expectations that the dollar rate would rise, resulting in higher profits, Bostan said.
The FAP chairman urged the government and opposition parties to solve issues through dialogue, warning that if political instability prevailed, the rupee could fall to a new low.
