Dollar drops to Rs124 after successful democratic transition

BUSINESS

KARACHI: The US dollar fell by Rs4 in the open market to reach Rs124, the Currency Exchange Association said Saturday.

End of political uncertainty following elections was attributed as the main factor in the significant drop in the greenback’s price, which had soared as high as Rs130 in the past week.

According to the association, the dollar price dipped due to a sufficient supply of the foreign currency in the local market.

The country’s economic fundamentals had deteriorated ahead of the July 25 general election. Since December, the rupee has cumulatively shed over 21% of its value after the State Bank of Pakistan reportedly abstained from intervening in response to the pressure exerted by a widening current account deficit.

Most financial analysts expect the incoming government to seek a post-election bailout from the International Monetary Fund.

Pakistan’s current account balance has widened sharply, while foreign currency reserves have plummeted over the past few years.