KARACHI: On Wednesday, the Pakistani rupee fell for the 14th straight business day, becoming the first time in history that it was worth more than Rs202 per US dollar on the interbank market.
Even though the country was running out of foreign currency, the credit default swap (CDS) showed that the country’s risk of default was still too high.
As the Pakistan Tehreek-e-Insaf (PTI) started its long march to the federal capital, the Pakistani rupee fell to a low of Rs202.49 during the day. This happened even though the coalition government attacked party workers and leaders to stop them from going to Islamabad. Later, the rupee got back some of what it had lost and ended the day at Rs201.92, which was 0.25 percent less than where it ended on Tuesday, which was Rs201.41.
The Head of Research at Pak Kuwait Investment Company, said, “The country’s risk of not paying its debts has gone up to 15%.” “When the economy is stable, it usually stays between 3 and 4 percent.” The CDS went up because Pakistan’s Eurobonds on the international market had yields that were too high.
The rise in yields to 26–27% shows that foreign investors are getting more worried about Pakistan’s sovereign bonds. “The rupee will keep falling until the International Monetary Fund (IMF) starts giving loans again,” he said.
Different sources say that the IMF will keep working with Pakistan to bring back the multibillion-dollar program. This means that the Pakistan-IMF talks in Doha (May 18–25) did not come to a conclusion and that the program’s rebirth has been put off for the time being.
