Pakistan’s currency took another tumble on Monday as Nawaz Sharif, the country’s jailed former prime minister, launched a legal appeal against his conviction for corruption, adding to political uncertainty ahead of next week’s election.

The Pakistani rupee slid more than 4.5 per cent against the dollar to close at PKR128 on Monday, with analysts predicting the new government would have to appeal for help from the International Monetary Fund to stave off a foreign currency crisis.

Policymakers have now allowed the carefully managed currency to fall around 20 per cent against the dollar since the beginning of last December as one way of managing an escalating balance of payments problem.

Lower exports and higher imports have led the country’s stocks of foreign reserves to decline to $9.5bn in recent months — not enough to cover two months’ worth of imports.

The latest slide in the currency was prompted in part by the news on Monday that Mr Sharif and his daughter have lodged appeals against their corruption convictions, three days after being jailed in Lahore.

They had both been sentenced in absentia on charges of owning property for which they could not account. They have protested their innocence, with family members suggesting the convictions are part of a conspiracy by the country’s powerful army, with which Mr Sharif has regularly clashed.

Pervaiz Rasheed, a former minister in Mr Sharif’s cabinet, said on Monday: “Legal experts including former justices who have looked at this case have concluded that there is no solid basis to the accusations.

“Mr Sharif, his daughter and her husband have approached the Islamabad High Court to seek a reversal of the verdict against them”.

Mr Sharif’s Pakistan Muslim League-Nawaz party is one of two favourites to win this week’s election, alongside the Pakistan Tehreek-e-Insaf, which is led by Pakistan’s former cricket captain, Imran Khan.

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Allies say Mr Sharif returned home on Friday from London to be arrested in part as a political gamble to win sympathy from the electorate.

“The most important verdict still has to come from the Pakistani public,” said one former member of his party. “Nawaz Sharif is convinced that if that verdict lands in his favour, the court’s verdict will be left behind.”

Arifa Noor, a political commentator for the Dawn newspaper, said: “There is a body of opinion which believes that a sympathy vote will emerge in favour of Nawaz Sharif on election day.”



Whichever party wins this week, analysts predict the country’s new prime minister will soon have to approach the International Monetary Fund for a bailout.

“The new government will have to return to the IMF soon after it gets in to office,” said Muhammad Suhail of Karachi’s Topline securities.

The president of a privately owned Pakistani bank added: “The economy has become Pakistan’s immediate problem number one. You will need to have tough and decisive actions very soon.”

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