According to information provided by the Exchange Companies Association of Pakistan, the rupee continued to fall sharply on Friday, trading at Rs266.6 per dollar at 10:32 am, down to Rs11.17 or 4.58 at day end.
Yesterday saw the biggest single-day loss in both absolute and percentage terms since the current exchange rate system were adopted in 1999, with the local currency’s value falling from Rs24.54 to a record low of Rs255.43 in the interbank market.
At the same time, the PKR was being traded on the open market for Rs265 per dollar. In comparison to yesterday’s pricing of Rs262, this represents a devaluation of Rs3 or 1.15 percent.
In order to restart the stalled International Monetary Fund (IMF) loan programme, the government lifted an unofficial cap on the USD-PKR exchange rate, which led to a sharp devaluation.
It happened the day after exchange companies declared that they would be removing their own rate cap on the open market. As anticipated, the action increased the dollar’s open market value to Rs252.5, but the State Bank of Pakistan (SBP) intervened to lower it to Rs243.
The action on Thursday shocked the currency market and caused a great deal of volatility. As currency dealers watched the movement of the dollar cautiously, trading in the interbank market remained light.
The country’s total reserves were $9.5 billion, down $990 million, and the holdings of commercial banks decreased by $68 million to $5.8 billion during the week.