Inquiry into sharp deterioration of PKR-US$ exchange rate in the interbank market

Finance Division has officially asked the Governor, State Bank of Pakistan (SBP), to initiate an inquiry into the sharp deterioration of PKR-US$ exchange rate in the interbank market on 5^th July 2017, and to send a report in this regard within a period of ten days. The inquiry has been recommended by the Finance Minister, Senator Mohammed Ishaq Dar, in his capacity as Chairman of Monetary and Fiscal Policies Coordination Board.

It may be recalled that, after concluding a meeting on this matter with the Presidents / CEOs of Banks on 6^th July 2017, the Finance Minister held a press talk in which he conveyed that a detailed inquiry will be held into the matter, and those responsible will be held to account.

The PKR-US$ exchange rate in the interbank market deteriorated by 3.1% from Rs. 104.90 per US$ on 4^thJuly 2017 to Rs. 108.25 per US$ on 5^thJuly 2017.

The sudden depreciation of PKR versus the US$ led to speculation and anxiety in the foreign exchange market.On the same day, i.e. 5^th July 2017, the Finance Minister took immediate notice and action on this matter. He called for a detailed report from the State Bank of Pakistan (SBP) on this artificial and unnatural deterioration in the PKR-US$ exchange rate, and he called an emergent meeting with Presidents / CEOs of Banks on 6^thJuly 2017. The Finance Minister's immediate notice and action resulted in stabilization of Pak-US$ exchange rate in the interbank market to Rs. 105.50 per US$ on 6^thJuly 2017 when the financial markets opened.