PKR plunges by Rs11.17 in interbank

 

The rupee continued to depreciate steeply in the interbank market on Friday, trading at Rs266.6 per dollar at 10:32am, down Rs11.17 or 4.58 per cent from yesterday’s close, according to data shared by the Exchange Companies Association of Pakistan (Ecap).

The local currency’s value declined Rs24.54 to a record low of Rs255.43 in the interbank yesterday, the largest single-day depreciation in both absolute and percentage terms since the new exchange rate system was introduced in 1999.

Separately, the PKR was changing hands at Rs265 per dollar in the open market at the same time. This equates to a depreciation of Rs3, or 1.15pc, over yesterday’s rate of Rs262.

The steep devaluation occurred after the government removed an unofficial cap on the USD-PKR exchange rate to revive the stalled International Monetary Fund (IMF) loan programme.

It came a day after exchange companies announced the removal of a self-imposed rate cap in the open market. The move, as expected, shot the open market value of the dollar to Rs252.5 but the State Bank of Pakistan (SBP) intervened to bring it down to Rs243.

Thursday’s move took the currency market by surprise and resulted in extreme volatility. Trading remained thin in the interbank as currency dealers were cautious in watching the dollar movement.

Analysts termed it a “much-awaited adjustment” and said it would help in increasing export proceeds and inward remittances through official banking channels.