KARACHI -UNS: The Pakistani rupee plunged to a record low of Rs255.43 against the dollar in the inter bank market on Thursday, sliding Rs24.54 or 9.61 per cent from yesterday’s close, after the removal of an unofficial price cap on the exchange rate.
It was the largest single-day decline in both absolute and percentage terms since the introduction of the new exchange rate system in 1999.
Separately, the PKR was being traded at Rs255 per dollar — also a record low — in the open market around 11:40am, according to data from the Forex Association of Pakistan. This equates to a depreciation of Rs12 or 4.94pc over yesterday’s rate of Rs243.
As a result, the difference in rates between the interbank and open markets, which had widened to Rs15 in recent months, was almost wiped out.
According to market sources it a “much-awaited adjustment” that allowed banks to quote an exchange rate based on demand and supply in the market.
The country adhered to a market-based exchange rate till September last year. However, afterwards the interbank rate was kept within a narrow band that gave rise to a grey market, he added.
“Now the grey market rate will come closer to the interbank rate. This will help in increasing exports and inward remittances through banking channels. This may also help in reviving the delayed ninth review with International Monetary Fund (IMF) and inflows from friendly nations.”
One of the main requirements to complete the ninth review of the IMF programme, which would unlock $1.2 billion, was adherence to a market-based exchange rate.
