The cost of political polarisation.

Unnerved by the endless political chaos the traders, manufacturers and service providers decided to go public with their stance on the current economic meltdown. Mindful of the political sensitivities, many tempered their tones but recorded their disappointment with the government over the economic management, particularly the currency market.

Disregarding the political polarisation an elite business platform repeated its earlier call to all political parties for collective efforts to pull the economy out of the current abys and put it back on track.

Before the market could fully absorb the news of the International Monetary Fund agreement (IMF) on the Extended Fund Facility (EFF) that paved way for the disbursal of $1.17 billion, the rout of PML-N in the by-elections in Punjab and the re-election of Hamza Sharif as chief minister on technical grounds, drowned the hopes of political stability in the foreseeable future.

The by-election results last week kicked in a fresh spell of currency devaluation and another cycle of depression in the capital market. Playing on fears, manipulators drove the rupee to stoop to Rs228 to a dollar in the open market and the pushed capital market closed the week little above 40,000 points.

Without a national consensus on major economic decisions, Pakistan will continue spiralling down

Of the $6bn EFF ending in September 2022, Pakistan has so far received $3.1bn. To match the higher financing needs of Pakistan in 2022-23, the IMF has consented to consider an extension of the programme to June 2023 and increase the size of the package to $7bn. The forex reserves meanwhile depleted to a dangerously low level of $9.1bn.

The policy rate now at 15 per cent has yet to tame the galloping inflation currently at a record high level of over 20pc month-on-month as prices of transport and food soared by 60 and 40pc respectively over the last three months.

Some business leaders sounded alarmist but the majority were cautious in their choice of words. They advised the government to appoint the governor of the state bank (SBP) without loss of time for effective management of the currency market that they thought was at the mercy of rogue traders. Over the past three months, the rupee tumbled under the watch of the seemingly helpless SBP.

'No, governor State Bank has no magic wand to fix all the problems but letting manipulators enjoy a free hand in the currency market in the middle of an external front crisis is absurd...