Following a court order extending the detention of former Pakistani Prime Minister Imran Khan, violence erupted in the country triggering rupee to slump to a record low.
The rupee fell by 1.9% and closed at an all-time low of 290.22 against a dollar based on State Bank of Pakistan data. On Thursday, bonds maturing in 2031 fell to their lowest point since November at 33.10 cents to the dollar due to these circumstances.
In response to the protests, Pakistan’s government requested the aid of their military to end the violent events after a judge ordered the 70-year-old politician to be in the custody of the anti-graft agency for eight days. He was detained on Tuesday.
Impacted by this unrest is Pakistan’s ongoing negotiations with the International Monetary Fund to restart its bailout program, without which the country would fall into 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.”