Pakistan Army Intelligence Officer Meets FX Body as Rupee Falls

A group of private foreign exchange companies in Pakistan met with the head of an intelligence department this week to discuss the local rupee’s slump.

“We briefed them about the current currency market situation,” said Malik Bostan , the chairman of the Exchange Companies Association of Pakistan, referring to a July 22 meeting with Major General Faisal Naseer, a director general in the Inter-Services Intelligence.

The meeting comes as the Pakistani rupee suffered its worst monthly decline in June against the dollar since November 2023. It underscores the power Pakistan military wields with a say in most critical matters, including markets and economy.

A spokesperson for Pakistan military didn’t immediately respond to a request seeking comments.

Bostan sees the rupee gaining against the dollar in a week, including in open market transactions where currencies are exchanged at money changers.

By some estimates, the curb rate or the informal rate for the rupee had risen to over 288 per dollar in the past few days. That compares to an exchange rate of 284.76 per dollar for the Pakistani rupee on Wednesday, according to central bank data.

Analysts are forecasting further pain for the currency on the back of increased import payments as the economy grows.

Al-Habib Capital Markets Pvt. sees the rupee at 296 at the end of the financial year that started July 1, which is a nearly 4% decline from Wednesday’s levels, according to Bloomberg calculations. Lucky Investments Ltd. sees the interbank rupee at 315 by June next year.

A falling currency feeds into inflation risks, posing another layer of challenge for the State Bank of Pakistan which is looking to support the economy that may see increased tariff rates on exports to the US.

“The rupee could be weighed down by import payments and outward remittances from companies, while inflows are insufficient to keep pace,” said Suleman Rafiq Maniya , an independent wealth manager in Karachi.