Muscat/Karachi: The exchange rate of the Pakistani rupee against the Omani rial hit a new high on Wednesday with the Omani rial reaching nearly 605 PKR, according to currency converter XE. Pakistani expats have been seen rushing to swap homes in Oman due to the rising exchange rate.

Abdul Ghaffar, a longtime Pakistani expat, said he was waiting for this moment due to market volatility and fears of further PKR depreciation. He hadn’t sent money home in months and was waiting for this moment to get good returns on his savings.

Another expat, Mohammed Mohsin, was also optimistic leaving the exchange house after sending money to Pakistan, as it was a “bonus” for him for the same amount of money he had. used to send in the past. The Pakistani Rupee (PKR) hit a new low against the US Dollar on Tuesday, closing at Rs 232.93 in the interbank market.

The local unit closed at 232.93 rupees in the interbank market, down from 229.88 rupees a day earlier, as it lost 3.05 rupees or 1.31% against the dollar, data showed. State Bank of Pakistan (SBP). Analysts say the lingering political crisis is to blame for the Pakistani rupee’s continued decline against the US dollar, Geo News reported.

Financial markets remained jittery amid an ongoing political crisis.
The rupee has been one of the world’s worst performing currencies, falling more than 30% year-to-date (2022), The News reported.

Tahir Abbas, Head of Research at Arif Habib Limited, said: “The scarcity of dollars, the political and economic uncertainty marked by ambiguity regarding the commitment of friendly countries, which is necessary for the disbursement of the tranche of the IMF, are the reasons for the persistent decline of the rupee”.

Fears grew over Pakistan’s stuttering economy as its currency fell nearly 8% against the US dollar in the past week of trading, while the country’s foreign exchange reserves sit below $10 billion with inflation at its highest in more than a decade, Geo News reported.

Alpha Beta Core CEO Khurram Schezad told that the dollar is strengthening in the global market almost against all global currencies – and the rupee is no exception.
Also, he said, Pakistan’s external account issues are yet to be resolved although imports are slowing.

He noted that while the International Monetary Fund is ready for disbursement, the flows have yet to materialize as final Board approval is awaited, Geo News reported.

“Global rating agencies have placed a negative outlook on the economy, so this is an additional burden on financial markets in general and the foreign exchange market in particular,” he added.

Muhammad Saad Ali, a capital market expert, told that rising political uncertainty – over whether the current government will stay in power long enough to stabilize the economy and continued confusion around who governs the province of Punjab – is causing the rupee to slip.

“Note that balance of payments pressure on the currency has eased, according to the central bank, which says Pakistan has enough capital commitments for the next 12 months to meet its dollar outflows,” did he declare.

“I repeat that political uncertainty weakens market sentiment and leads to further depreciation of the rupee,” Ali added.

With ANI inputs