Daily Times

The rupee has been losing value for a good few years now, but it’s as if the floor was removed from under it not long after the no-confidence motion in the national assembly led to the abrupt end of the PTI administration.

It took a few days for the market to factor in the bad news about the suspension of the IMF program, but it’s been all downhill ever since. First, it was the disruption of the bailout facility combined with the political uncertainty that kept the currency under pressure.

Then there was more political uncertainty and more bad news, in the form of extremely strict prior conditions, from the IMF. And now it’s yet more political uncertainty and an importers’ rush for dollars that will not give the rupee any breathing space whatsoever.

Both the state bank and the finance ministry are doing what they can to play down the risk of this slide – effectively trying to remove fear from the market – but with no success so far. Even the staff-level agreement with the IMF, to revive the EFF (Extended Fund Facility), had no effect. That’s why most stakeholders would have taken Finance Minister Miftah Ismail’s assurance, that the pressure on the rupee would vanish in a few more days or weeks, with a pinch of salt.

He is, however, very right that this epic fall of the rupee will only show signs of stopping once IMF’s dollars make their way to the vaults of the state bank. That is why it is a little perplexing that they have not arrived yet.

The government bent over backwards to comply with its harsh conditions, even burnt precious political capital for which the ruling party has already had to pay very dearly, yet the Fund seems to delay matters for one reason or another. Quite clearly, then, we must all sit and wait till the bailout money comes so the rupee can find some strength once again. *