Rupee suffers a severe beating and drops to an interbank low of 255.

KARACHI: The rupee suffered a severe loss versus the dollar in the interbank and open markets on Thursday as a result of the lifting of an unofficial ceiling on the dollar exchange rate.

Today’s intraday transaction in the interbank market saw the rupee plummet as it lost more than Rs24, the most since July 2022.

Rupee suffers a severe beating and drops to an interbank low of 255.
Many people assumed that the government was controlling the exchange rate since, over the last several months, the local currency had maintained its position in the interbank market and had not declined as experts had predicted.

According to statistics from the State Bank of Pakistan, the dollar ended at Rs230.89 the day before.

However, during intraday trade today, the dollar was trading at Rs255 in the interbank market.

Rupee suffers a severe beating and drops to an interbank low of 255.
The interbank rate changed by Rs24.11.

The rupee hasn’t dropped this much against the dollar since it reached Rs239.94 on July 28, 2022, in the interbank market.

On the other hand, ECAP data revealed that the dollar was being sold at 255 during intraday session after losing Rs12.

PTI condemns Dar
Asad Umar, the leader of Pakistan Tehreek-e-Insaf (PTI), criticised Finance Minister Ishaq Dar for having a “false ego” and damaging the nation’s economy with it.

He said, “Those who were claiming to lower the dollar below 200 have raised it beyond 240.”

Millions of people are jobless, thousands of enterprises are destroyed, and billions of dollars in exports and remittances are lost as a result of the false ego. Who will be held accountable for this catastrophe?

Exchange rate SBP is “adjusting”
Capital market expert Muhammad Saad Ali commented on the developments in the financial markets, stating that “the SBP is seemingly adjusting the exchange rate to the market rate – closer to open market to address the widening difference between the official and open market rate and to curb the flow of dollars through the informal market.”

In order to assure the continuation of the International Monetary Fund’s (IMF) loan programme, which has pushed Pakistan toward a market-determined currency rate, he said, this is a crucial step.

“Right step”
In the meanwhile, Dr. Khaqan Hassan Najeeb, a former advisor to the Finance Ministry, said that allowing the market to determine the value of the rupee was the “correct step” given the country’s “serious dollar liquidity shortage, limited reserves, and Pakistan’s need to go forward with the IMF.”

Pakistan’s exchange rate is set by the market. The trade imbalance, supply and demand variables, and economic fundamentals have a significant influence on currency movements in this environment,

Najeeb said, “Remittances will flow to legal channels as well as exporters would dump their receipts as the gap between market rates and interbank closes.”

The analyst said, “This may assist relieve the supply of dollars in the interbank.”