Pakistan Stocks Tumble, Rupee Plunges at Record Low amid Looming US Sanctions

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Pakistan’s stocks fell, and the rupee plunged to a record low after a U.S. Senate introduced a bill seeking an investigation into Islamabad’s alleged role in the Taliban’s takeover in Afghanistan. Investors in Pakistan got cold feet as the benchmark KSE-100 index plunged nearly 3 percent, its most since March last year,whereas the rupee fell 0.3 percent to close at a record low of 170.48 per dollar, on Wednesday, Bloomberg reported.

Meanwhile, investors are concerned about the probability of sanctions on Pakistan, after a group of US Senators introduced a bill in the seeking sanctions on the Afghan Taliban and the foreign governments that support the outfit. Over 20 US Republican Senators introduced a new legislation titled ‘Afghanistan Counterterrorism, Oversight, and Accountability Act’ that aims to tackle the situation in the war-torn nation after the U.S. made an abrupt withdrawal from the region last month.

Samiullah Tariq, head of research and development at Pakistan Kuwait Investment Company Pvt Ltd, told media outlet Dawn that the development appeared to be related to the U.S. Senate bill seeking to impose sanctions on the Afghan Taliban, which could also extend to Pakistan.

“Dollar parity is consistently rising as demand for the dollar is high due to the current account deficit,” he told the publication. “The Afghan situation is also adding pressure,” Tariq added.

The prospect of the draft legislation becoming law is not clear yet, as the bill sets out provisions for establishing a US state department taskforce to review foreign assistance to countries supporting the Taliban and imposition of sanctions on their supporters including foreign governments thereafter.

If the bill clears the Senate passage — support from both Houses and is signed into law -the US president will have the power to enforce sanctions on individuals and outfits who provide any support to the Taliban, Hindustan Times reported.

Pakistan has long been accused of providing safe haven and assistance to the Afghan Taliban in their attempt to overthrow the democratically elected government in Afghanistan, a charge Islamabad categorically denies.

In spite of the legislation’s prospects, bipartisan frustration in Washington D.C. has long been brewing over its ties with Islamabad. The implications could have wider repercussions as any further strain could further deteriorate Prime Minister Imran Khan’s attempts to revive a suspended loan program with the International Monetary Fund (IMF), Bloomberg mentioned.

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