Pakistan’s national currency on Thursday witnessed its biggest one-day decline in over 24 years. It fell more than 9 percent against the dollar as Pakistan tried to waive International Monetary Fund (IMF) conditions for resuming $7 billion in aid. dealers and analysts said.
The rupee closed one of the most volatile trades of the year at 255.43 against the dollar. According to the data released by the National Bank of Pakistan, the Pakistani currency has seen a significant drop of around 9.61 percent or over 24.53 rupees in the interbank market.
According to research by Arif Habib Limited, the Pakistani rupee depreciated by 9.9% against the US dollar in one day on October 26, 1998.
Mohammad Sohail, CEO of Topline Securities, told Arab News, “The long-awaited PKR adjustment was made today by allowing banks to set rates based on market supply and demand.
Sohail said until September 2022 when bank rates were kept in a narrow range until the emergence of the black market. He hopes the move will pave the way for the revival of the stalled IMF program.
He said: “Now the black market rates are getting closer to bank rates.” It may also help revive the postponed ninth review with the IMF and inflows from friendly countries.
During the day’s trading, the Pakistani rupee fell to 259.75 rupees on sell and 254.75 rupees against the dollar as Pakistani authorities apparently allowed the currency to adjust according to market supply and demand needs.
According to a report by the Stock Exchange Association of Pakistan (ECAP), the currency registered a sharp decline in the open market, with buying from Rs19.4 to Rs260 and selling from Rs19 to Rs262 against the dollar.
ECAP announced late on Tuesday that it has lifted the currency cap for the benefit of the country.
Moving from a controlled exchange rate to a free floating exchange rate
