By Neelam Rahim

The finance minister Miftah Ismail told the Reuters News Agency that the panic is primarily due to political turmoil, which he says should subside in a few days. The rupee fell 2% on Monday and 3% on Tuesday despite last week’s staff level agreement with the IMF that would pave the way for a displacement of 1.17 billion under resumed payments of a paid-out package.

Speaking to Radio Islam International is Dr Sajid Amin, the deputy Executive director at the Sustainable Development Policy Institute of Pakistan.

According to Dr Sajid, the rupee is more or less where people expect it to go. There has been a deep slide, but within the last few days, particularly yesterday, it has been somewhat stable and not as much as we have witnessed.

He says going back to the march over the last couple of years, particularly from 2018/19 onward, three key factors are pushing the rupee. Political uncertainty is putting pressure, creating a panic in the market, particularly the delay of the MS program.

Dr Sajid tells Radio Islam that he has also written that when you have poor economic fundamentals, a growing macro-economic crisis and a balance of payment crisis, political stability becomes very handy. And if there is political instability catalyses the pressure on the rupee and thus is where the myriad on the recent four days episode is.

He says there has been more speculation on the rupee, which has been on the fate of the IMF, particularly on the new government’s future.