The economies of Pakistan and India have suffered and the currencies have dropped down as the tension between India and Pakistan has escalated.
Pakistani Rupee closed to a record low of Rs 139.25 against the US dollar in the inter-bank market. Also, gold reached an all-time high of Rs70,000 per tola. This is understood in the background of two Indian fighter jets were shot down by Pakistan and a pilot arrested as Indian air forces violated Pakistani airspace.
Due to the escalation in tension a few foreign investors were convinced to offload their shares and leave the Pakistan Stock Exchange (PSX).
Also read: Pak Rupee to reach Rs148 against the US dollar by the end of FY 2018-19 – Fitch Solutions
As per a banker, the reason for the depreciation of rupee against the dollar is mainly the political tensions that have risen up. Also, the increase in global oil prices also pushed the rupee down against the US dollar.
The rupee dropped by Rs0.37 as reported by the State Bank of Pakistan and reached Rs139.25 in the inter-bank market.
According to the banker, “The rupee may dip to Rs140-142 against the US dollar if the oil price maintains the upward trend in the next one week to 10 days.”
Adding, “The escalating tension convinced foreign investors at the PSX to leave. The situation created additional demand for dollars.”
Bostan said, “However, the central bank assured swift supply of dollars in the market through commercial banks. We have placed an order for $2 million and commercial banks will supply the amount on Thursday to the currency dealers.”
All Sindh Saraf and Jewellers Association President Haji Haroon Chand said, “The gold partly surged due to expected additional demand anticipated to come from investors who usually invest in the commodity during times of geo-political tensions.”