Despite assurance of the new governor of the central bank that there would be no free float, the rupee fell to a new record low on Wednesday as the US dollar hit an all-time high of Rs163 in interbank trading.
The day saw a decline of 3.8 per cent in the value of the rupee against the dollar. It has lost about 35pc since May 2018 when the dollar traded at Rs121.
The surprise big devaluation of the local currency took place after declaration by the State Bank of Pakistan governor that the exchange rate would be market-based and that the free float was not suitable for the country’s economy.
Central bank nowhere to be seen
“There was no State Bank and no interference to bring calm in the volatile exchange rate market,” said a senior banker, who added that the dollar traded as high as Rs163 in the interbank market.
He said the market began trading the dollar Re1 higher than the previous day and soon it was felt that there was no barrier to move forward.
