The nation has witnessed a sudden devaluation of local currency against the US dollar in interbank trading on Friday morning, as the Pakistani currency has hit an all-time high of Rs144 during intraday trading.
According to the sources the sudden rise of Rs10 in the value of the US dollar is based on the government’s commitments to the International Monitory Fund (IMF).
After intervention by the State Bank of Pakistan (SBP), the dollar closed at Rs137.70 in the interbank market, reports local media.
On Thursday, the US dollar, which was being traded at Rs134, opened higher at Rs142 on Friday. While the local currency further devalued by Rs2 to Rs144 before setting to Rs140 at midday.
Finance Minister Asad Umar addressed the issue and said that the State Bank sets the currency rate.
Rupee value cannot be controlled forever. Even during the PML-N’s tenure, the value of rupee against dollar had reduced by Rs28,” he said.
“We artificially increased the value of rupee by purchasing dollars. As a result, we started importing vegetables and we were unable to export surplus sugar and wheat without providing subsidiary,” he said.
“The issue of dollar is associated with supply and demand”, he further added that, “The gap between supply and demand of dollar will remain until we address the issue of production and foreign investment.”
“We had two options; either to continue the old practice of artificially controlling the value of rupee or to devalue the rupee”, said the finance minister.
It is being termed as the first major devaluation strike against the local currency during the Pakistan Tehreek-i-Insaf-led (PTI) government in Pakistan.
Earlier on Oct 9, 2018, the value of the dollar had shot up by Rs11.70 in the interbank market during trading before closing at Rs133.64. It had closed the previous day at Rs124.27 to the dollar a day earlier.