Why the dollar continues to rise against Pak Rupee?

 The Pak Rupee has lost Rs 12 against US dollar in last two days as the after shocks of  Punjab by polls continues

The State Bank of Pakistan and finance ministry is silently watching as US dollar has trounced the Pak Rupee in last two days. The dollar continues to rise against Pak Rupee in last two days. The Rupee has lost Rs 8 against dollar today and closed at record high of Rs 224. The Rupee has lost Rs 38 against dollar during the three months rule of coalition government led by PM Shahbaz Sharif. The Rupee fell Rs 58.88 against dollar during the 44 months rule of PTI government.   
The government and SBP are not taking action to stablise the Rupee and to stop the further fall. The SBP autonomy bill passed by the previous PTI government has become a big hurdle for the SBP and the government to intervene in the situation. The IMF is arguing for a market based exchange rate and oppose any SBP or government intervention in the determination of the exchange rate. But government  needs to intervene to stabilise the falling Rupee. 
There are four main reasons of rapid fall of Rupee. one is that US dollar has gained strength globally against all the major currencies including Euro. The second reason is the fast depleting foreign reserves of Pakistan. Pakistan needs dollars for imports. The third reason is the continues political instability and uncertainty  in the country.  The Fourth reason is the speculative buying of dollars. Many investors are buying the dollars to take advantage of the situation. The government must take action against all those involved in this speculative activity. 
The results of Punjab by polls in which PML-N lost and PTI won has increased the political uncertainty. The PTI is likely to form the government in Punjab and political confrontation might increase between federal government and pTI led Punjab government.  Imran Khan is demanding immediate general elections while federal government is resisting this demand. these factors have increased pressure on Rupee. 
The rising dollar and falling Rupee will further increase the prices of imported goods. The crude oil, food and electricity prices are likely to rise. The inflation might go further up. Pakistan needs political stability to stablise the economy. The economy is paying heavy price as political chaos and instability persists.  
                                                                 Khalid Bhatti 

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