Pakistan's rupee slumped to a new record low as the military stepped in to squash violent protests that erupted after former premier Imran Khan was arrested this week.
The rupee slid 3.3% to an all-time low of 300 a dollar on Thursday, according to the foreign-exchange desk at Arif Habib Ltd. Dollar bonds due 2031 rose from the lowest since November on Thursday and were indicated at 33.44 cents on the dollar.
Pakistan's government called in the military to help end violent protests after a judge on Wednesday ordered the 70-year-old politician to be put under the custody of the anti-graft agency for eight days.
He was arrested on Tuesday. The unrest comes as the government negotiates with the International Monetary Fund to restart its $6.5 billion bailout program, which it needs to avoid a default.
"Pressure had built up after a few months of stability," said Saleem Amjad, chief executive officer at Link International Exchange Co. in Lahore. "Sentiment turned sour given the political turmoil, the prospect of another delay in the IMF loan and a drop in remittances."
The Supreme Court will hear Khan's appeal against his arrest later Thursday. At least seven people were killed in the past two days and scores more injured.
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