Pakistan’s rupee slumped to a record low as clashes broke out in the country following a court order to extend former Prime Minister Imran Khan’s detention to more than a week.
The rupee slid 1.9% to close at an all-time low of 290.22 a dollar on Wednesday, according to State Bank of Pakistan data. Dollar bonds due 2031 fell to the lowest since November on Thursday and were indicated at 33.10 cents on the dollar.
Pakistan’s government called in the military to help end violent protests after a judge ordered the 70-year-old politician be put under the custody of the anti-graft agency for eight days. He was arrested on Tuesday. The unrest comes as the government negotiates with the International Monetary Fund to restart its bailout program, which it needs to avoid a default.
“The rupee is weakening on economic and political uncertainty, especially the delay in the IMF loan program,” said Owais-ul-Haq, a currency trader at Arif Habib Ltd. “The arrest of Imran Khan just worsened the situation.”
Prime Minister Shehbaz Sharif said in a televised speech that protesters were committing “an act of terrorism” while the military warned that stern action would be taken against those damaging state and army property.
--With assistance from Niluksi Koswanage.
(Updates with a trader’s comment in 4th paragraph.)
Author: Karl Lester M. Yap and Ismail Dilawar
