Pakistan’s Rupee Declines This Week After Violence in Karachi

Pakistan’s rupee headed for third weekly decline on speculation investors will shy away from the nation after violence in Karachi killed 76 people following the assassination of a government lawmaker. Shootings between unidentified opponents ensued after Raza Haider was gunned down on Aug. 2, causing businesses to shut and prompting public transport owners to strike in protest. The currency dropped to a three-week low on Aug. 3, while the Karachi Chamber of Commerce & Industry estimated financial losses of 10 billion rupees ($117 million) over three days. “The violence and strike will hurt investor sentiment even if it doesn’t have a direct impact on the currency,” said Khurram Schehzad, head of research at Invest Capital & Securities Ltd. in Karachi. “We will see the impact of violence in coming weeks as investors pull out funds.” The rupee fell 0.1 percent this week to 85.76 against the dollar as of 8:38 a.m. in Karachi, according to data compiled by Bloomberg. The currency reached 85.86 on Aug. 3, the lowest level since July 13, and has declined 1.7 percent so far this year. The Karachi 100 Index of stocks dropped 1.6 percent this week, its worst five-day performance since June 11. The exchange closed an hour early on Aug. 3 due to the strike. Interior Minister Rehman Malik accused a banned militant group, Sipah-e-Sahaba, of killing Haider as part of its campaign against members of the minority Shiite sect, according to the state-run Associated Press of Pakistan.