Pak rupee, stocks tumble as budget fails to restore investor confidence

The Pakistani rupee (PKR) and stock markets lost further ground on Monday as the coalition governments maiden budget for the next fiscal year 2022-23 failed to restore investors' confidence, contrary to the expectation of the market.

The local currency surpassed the critical threshold of 204 against the US dollar in the interbank market during intra-day trade, while the benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) plunged by nearly 800 points, Geo News reported.

"The sentiment is negative across all capital markets today," capital market expert Saad Ali said.

The expert said that the federal budget for the next fiscal year was being seen as a "major milestone" for the revival of the stalled $6 billion International Monetary Fund (IMF) programme, Geo News reported.

However, Ali stated that the markets believe that the federal budget is "insufficient" and the Fund may not accept this budget.

"In line with the statement of Finance Minister Miftah Ismail over the weekend, the market players expect that the government might have to revisit its proposed allocations and targets set in the federal budget in order to convince the IMF," he added.

Ali added that the federal budget has further jeopardised the revival of the much-awaited IMF programme.

He maintained that more clarity is needed as for now the sentiments are the government will have to do more.

--IANS

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