For the straight fifth day, Pakistan Stock Exchange (PSX) suffered a loss due to depreciation in Pakistani rupee (PKR) value, rumours of a hike in interest and economic uncertainty. On Thursday (August 31, 2023), the KSE-100 index lost 1,747.63 points and plunged to 44,496.92 by 2:49 p.m. This was a 3.78 pc decrease if compared to the closing number of yesterday – 46,244.55.
Raza Jafri, Equity head of Intermarket Securities, attributed the KSE-100’s severe selling pressure to the lack of confidence due to the weak economy, and depreciating value of rupee against the US dollar.
According to the Exchange Companies Association of Pakistan, the Pakistani rupee slid further by Rs1.10 against the US dollar in the interbank market. The greenback stood at Rs305.55 at 12:30 pm.
The devaluation of the PKR has caused inflation and pushed the central bank to raise interest rates. News sources reported that a hike in interest rate would mitigate the repercussions of the local currency’s depreciation. It added that the steep devaluation will even cross the limit set by the IMF.