Pakistan’s currency suffered a massive hit on Friday as the dollar rose to all time high at Rs 144, a day after the government celebrated its 100-day achievements, including new investments in the country to put it on the right track of development.
The Pakistani currency shed 10 rupees in inter-bank trading by Friday afternoon after it was traded at 134 rupees on Thursday.
It opened at a high of 142 rupees in the morning and the local currency further devalued by 2 rupees to 144 rupees.
“There is panic in the market and buying spree is going on but it will be addressed,” an official of State Bank of Pakistan told PTI.
It is believed that the devaluation was linked with the government’s talks with the International Monetary Fund (IMF) to secure loan.
Recently, the cash-strapped Pakistan’s negotiations with the IMF for a bailout package faced difficulties as the international lender sought complete disclosure of Chinese financial support and hiking of energy prices and levying more taxes.
Zaffar Paracha, General Secretary of the Exchange Companies Association of Pakistan (ECAP), said that the devaluation was expected before any agreement with the IMF.
“It seems a continuation of the IMF’s condition for a bailout package,” he said.
Paracha demanded the government to properly announce the devaluation to end the panic among currency dealers. The devaluation comes a day after the Pakistan Government celebrated its achievements of 100-day in office. Prime Minister Imran Khan addressing an audience on Thursday said that investors were coming to invest as country was put on right direction to development.
But it was not reflected in the currency market and dollar rose by Rs 10 in open market and was trading at highest Rs 144 at one point before rupee wobbles to gain some strength.
Faisal Vada, minister for water resources, told media that black marketing was the main reason for the massive devolution.
“Black market of dollars was on the peak when we took over and it is still on peak,” he said, adding that government measures will help rupee to regain value in coming days.
Financial analyst, Zubair Saleem said the sudden devaluation of the local currency is not a good sign for coming days for the business community particularly the importers.
“This is going to increase the import bill of the country and we might witness further devaluation of the rupee to the US dollar,” he cautioned.
It was the second devaluation since the current government came to power in August.
On October 9, dollar had gained Rs 11.70 as panic gripped the market but finally it settled at around Rs 134.
Earlier, the caretaker government in June and July devalued rupee massively form Rs 102 to Rs 130 against one dollar.