Pakistan’s rupee headed for the biggest weekly loss in three years and stocks fell as investors shunned the nation’s assets amid mounting tensions with the US.
A US-led NATO airstrike killed 24 Pakistani troops on the northwestern border with Afghanistan on Nov 25, drawing the wrath of the country’s leaders. Army Chief General Parvez Ashfaq Kayani has told his forces they can respond to any future attacks without waiting for orders from senior officers, the Dawn newspaper reported.
“Rising tensions between with the US are worrying investors and putting pressure on the rupee,” said Malik Bostan, a spokesman for the Karachi-based Forex Dealers Association. “Earlier it was only economic issues worrying investors such as the trade gap and falling investment.”
The currency declined 1.4 percent this week to 89.0497 per dollar as of 2:32 PM in Karachi, the biggest five-day drop since October 2008, according to data compiled by Bloomberg.
It earlier reached 89.1050, the lowest level since Bloomberg started compiling the data in 1988.
Helicopters from the North Atlantic Treaty Organization and US fighter aircraft fired at Pakistani border posts on the mountainous frontier between Afghanistan’s Kunar province and the Pakistani district of Mohmand, according to the army. The US is investigating the incident.
The nuclear-armed nation had already closed border crossings to trucks carrying supplies for US-led forces in Afghanistan and ordered American personnel to vacate the Shamsi airbase in Pakistan’s southwest that has served as a launching point for Predator unmanned aircraft.
In protest to the recent strike Pakistan boycotted an international conference on Afghanistan to be held in Germany next week.